IBM’s bet on AI continues to pay off, as the firm surpasses expectations and extends a yearlong rally that has outperformed the broader stock market.
Data from the firm’s Q3 results show that IBM generated $16.3 billion in revenue for the quarter ending in September, up 9% year-over-year and beating the consensus estimate of $16.09 billion.
IBM’s software revenue is up 10% to $7.2 billion, while infrastructure revenue climbs to $3.6 billion, a 17% surge. CEO Arvind Krishna says IBM’s performance was anchored by stronger enterprise demand for AI-powered solutions and automation tools across industries.
“This quarter we accelerated performance across all of our segments, and again exceeded expectations for revenue, profit and free cash flow. Clients globally continue to leverage our technology and domain expertise to drive productivity in their operations and deliver real business value with AI. Our AI book of business now stands at more than $9.5 billion.”
The company closed the quarter with $14.9 billion in cash, restricted and marketable securities, and raised its full-year guidance, now expecting more than 5% constant-currency revenue growth and $14 billion in free cash flow.
News of the revenue beat drove IBM to as high as $289 before ending Wednesday’s trading session at $287. The stock is up 30% since opening the year at $221. Meanwhile, the S&P 500 is up about 13% over the same time period.
Futurum Group CEO Daniel Newman says IBM’s Q3 performance is a sign that “AI enterprise is real.”
“IBM delivers 9% rev growth and an EPS beat. Guiding up across the board…. IBM just delivered with a $9.5 billion book of GenAI business.
Even if the market sells the print, this is very positive for AI demand.
Been saying it for some time: companies like IBM are the signal that AI isn’t just ChatGPT.”
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