After exceeding revenue expectations for the latest quarter and indicating a surge in demand for artificial intelligence, International Business Machines Corp.’s stock surged over 5% in the extended session on Wednesday.
The company reported a net income of \(3.3 billion, or \)3.55 per share, compared to \(2.9 billion, or \)2.96 per share, in the same period last year. Analysts had anticipated an adjusted profit of $3.79 per share for IBM’s continuing operations.
While many focus on the winners in the property market, this seasoned executive argues that there is untapped potential in the underperformers. Revenue climbed from \(16.7 billion to \)17.4 billion, surpassing FactSet’s estimate of $7.3 billion. Software, consulting, and infrastructure revenues all saw growth of 3% and 6%, respectively.
Notably, the company experienced an 8% increase in Red Hat sales within its software division, contributing to a total revenue of $7.5 billion. Moreover, profits from technology related to data and artificial intelligence rose by 1%.
IBM’s CEO, Arvind Krishna, highlighted the growing demand for AI, revealing that the company’s order book for WatsonX and cognitive AI nearly doubled from the second to the third quarter.
In a surprising move, Tesla cautioned Wall Street about the possibility of reducing car purchases this time around.
IBM’s management anticipates revenue growth to align with its mid-single-digit model for the entire year, despite an expected one-percentage-point negative impact on top-line growth due to foreign exchange fluctuations.
Furthermore, IBM aims to achieve a free cash flow of approximately $12 billion by 2024.
