IBM jumps 13%, heads for best day since 2000 on strong earnings
Chairman, President and Chief Executive Officer of IBM Arvind Krishna attends the 55th annual World Economic Forum (WEF) meeting in Davos, Switzerland, Jan. 22, 2025.
Yves Herman | Reuters
IBM surged 13% Thursday on the back of a strong fourth-quarter print that showed artificial intelligence growth boosting its software business.
The move put the stock on pace for its best day since July 20, 2000, when shares popped 13%.
The company reported adjusted earnings of $3.92 per share adjusted on $17.55 billion in revenue after the bell Wednesday. Analysts polled by LSEG had expected earnings to come in at $3.75 per share and revenues to reach $17.54 billion.
IBM reported a 1% rise in revenues overall, while its software unit grew 10% on a year-over-year basis amid growing demand for artificial intelligence and its operating system known as Red Hat Linux. CEO Arvind Krishna also said that the company posted $5 billion in bookings for its generative AI segment.
“We closed the year with double-digit revenue growth in Software for the quarter, led by further acceleration in Red Hat,” he said in a statement. “Clients globally continue to turn to IBM to transform with AI.”
JPMorgan analyst Brian Essex maintained his neutral rating on the stock but said the firm remains “encouraged” by IBM’s software strength and growth trajectory. Goldman Sachs analyst James Schneider reiterated his buy rating, saying that software strength should benefit the IBMs turnaround plan.
Shares of IBM have gained 18% since the start of the year.
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