Overview
- IBM reported revenue of $16.33 billion and adjusted EPS of $2.65, topping estimates, and raised full‑year guidance to more than 5% constant‑currency revenue growth and about $14 billion in free cash flow.
- Growth in the hybrid cloud unit Red Hat slowed to roughly 14% year over year, or about 12% in constant currency, and software revenue rose 10% to $7.21 billion, sending the stock down roughly 5%–7%.
- Infrastructure revenue climbed 17% to $3.56 billion on strong demand for AI‑optimized mainframes, which IBM said are being widely adopted by financial firms to meet data residency and encryption needs.
- IBM’s AI book of business expanded to $9.5 billion, up about $2 billion from last quarter, and consulting revenue grew 3% to $5.32 billion with hundreds of active AI projects.
- Analyst views diverged as Bank of America reiterated a Buy and lifted its price target to $315 while others trimmed targets, and management guided Red Hat toward mid‑teen growth into 2026 and continues to deploy AI using partners such as CoreWeave and the major hyperscalers.