International Business Machines Today<\/h3>\n\n![\"International](\"https:\/\/www.marketbeat.com\/logos\/thumbnail\/international-business-machines-co-logo.png?v=20221020160751\")
<\/div>\nIBM<\/a>![\"IBM](\"https:\/\/www.marketbeat.com\/originals\/ibms-ai-bet-pays-offwhats-next-for-investors\/vertical-align:top;width:50px;\" "\\"90-day")
<\/a><\/p>\nInternational Business Machines<\/p>\n<\/div>\n<\/div>\n
$252.31<\/strong> -1.13\u00a0(-0.45%)<\/strong> <\/p>\nAs of 03:59 PM Eastern <\/p>\nThis is a fair market value price provided by Polygon.io. Learn more.<\/a><\/span><\/div>\n<\/div>\n<\/div>\n\n\n- 52-Week Range<\/dt>\n
- $162.62<\/p>\n
\u25bc<\/span><\/span><\/p>\n$265.72<\/dd>\n<\/div>\n
- Dividend Yield<\/dt>\n
- 2.65%<\/strong><\/p>\n
- P\/E Ratio<\/dt>\n
- 39.36<\/strong><\/dd>\n<\/p>\n
- Price Target<\/dt>\n
- $225.53<\/strong><\/dd>\n<\/p>\n<\/dl>\n<\/div>\n<\/div>\n<\/div>\n
International Business Machines NYSE: IBM<\/span><\/a> has had a solid start to 2025. Shares are up 15% as of the Feb. 6 close. This was mostly due to its recent earnings report, which surpassed expectations. IBM, a lesser-talked-about player in AI<\/a>, is positioning itself as a formidable force.<\/p>\nAlong with its strong earnings results, the company noted that it sees the development of the distilled DeepSeek models as a validation of its strategy.<\/p>\n
Below, I\u2019ll break down the earnings report and provide further details on the company\u2019s long-term strategy. I\u2019ll finish off by giving my overall take on IBM shares.<\/p>\n
IBM: Shares Spike After AI Bookings Surge<\/strong><\/h2>\nAfter IBM\u2019s Q4 2024 earnings results<\/a>, shares of the tech company<\/a> jumped by around 13% in one day. On revenue, the results came in essentially in line with estimates at $17.6 billion, exhibiting growth of only 2%. The company\u2019s software segment led the way, with sales rising by 11%. Its software solutions focus largely on helping manage applications that exist in hybrid cloud environments. On earnings per share (EPS), the company solidly beat estimates by nearly 4% as margins in its software segment increased by 220 basis points.<\/p>\nWhen it comes to AI, the company saw its bookings related to the technology increase by $2 billion compared to the third quarter of 2024. This is a massive increase of 67% in just one quarter. In GenAI, the company’s bookings and revenue come 80% from its consulting segment and 20% from its software segment.<\/p>\n
In consulting, the firm works with businesses to figure out how they can tangibly implement GenAI to drive improved performance. Overall, the company\u2019s consulting business grew by only 1% in the quarter. The company attributed this to the fact that customers are \u201creprioritizing their IT spending towards digital transformation and AI initiatives.” Customer spending is shifting toward AI. This change is likely hurting IBM’s non-AI consulting business. Those changes in spending have yet to result in a strong increase in overall consulting revenue. This segment should return to growth as the company is able to recognize its billions in bookings as actual revenue.<\/p>\n
\nInternational Business Machines Co. (IBM) Price Chart for Friday, February, 7, 2025<\/h3>\n
<\/div>\nInternational Business Machines<\/p>\n<\/div>\n<\/div>\n
- \n
- 52-Week Range<\/dt>\n
- $162.62<\/p>\n
\u25bc<\/span><\/span><\/p>\n
$265.72<\/dd>\n<\/div>\n
- Dividend Yield<\/dt>\n
- 2.65%<\/strong><\/p>\n
- P\/E Ratio<\/dt>\n
- 39.36<\/strong><\/dd>\n<\/p>\n
- Price Target<\/dt>\n
- $225.53<\/strong><\/dd>\n<\/p>\n<\/dl>\n<\/div>\n<\/div>\n<\/div>\n
International Business Machines NYSE: IBM<\/span><\/a> has had a solid start to 2025. Shares are up 15% as of the Feb. 6 close. This was mostly due to its recent earnings report, which surpassed expectations. IBM, a lesser-talked-about player in AI<\/a>, is positioning itself as a formidable force.<\/p>\n
Along with its strong earnings results, the company noted that it sees the development of the distilled DeepSeek models as a validation of its strategy.<\/p>\n
Below, I\u2019ll break down the earnings report and provide further details on the company\u2019s long-term strategy. I\u2019ll finish off by giving my overall take on IBM shares.<\/p>\n
IBM: Shares Spike After AI Bookings Surge<\/strong><\/h2>\n
After IBM\u2019s Q4 2024 earnings results<\/a>, shares of the tech company<\/a> jumped by around 13% in one day. On revenue, the results came in essentially in line with estimates at $17.6 billion, exhibiting growth of only 2%. The company\u2019s software segment led the way, with sales rising by 11%. Its software solutions focus largely on helping manage applications that exist in hybrid cloud environments. On earnings per share (EPS), the company solidly beat estimates by nearly 4% as margins in its software segment increased by 220 basis points.<\/p>\n
When it comes to AI, the company saw its bookings related to the technology increase by $2 billion compared to the third quarter of 2024. This is a massive increase of 67% in just one quarter. In GenAI, the company’s bookings and revenue come 80% from its consulting segment and 20% from its software segment.<\/p>\n
In consulting, the firm works with businesses to figure out how they can tangibly implement GenAI to drive improved performance. Overall, the company\u2019s consulting business grew by only 1% in the quarter. The company attributed this to the fact that customers are \u201creprioritizing their IT spending towards digital transformation and AI initiatives.” Customer spending is shifting toward AI. This change is likely hurting IBM’s non-AI consulting business. Those changes in spending have yet to result in a strong increase in overall consulting revenue. This segment should return to growth as the company is able to recognize its billions in bookings as actual revenue.<\/p>\n
\nInternational Business Machines Co. (IBM) Price Chart for Friday, February, 7, 2025<\/h3>\n