IBM Stock Rockets as AI-Driven Revenue Growth Fuels Optimism—Crucial Price Points to Watch

Highlights

• IBM's shares soared after surpassing expectations in Q4 earnings and providing robust revenue guidance, fueled by heightened demand for AI solutions and consulting services.
• The company revealed its generative AI business doubled since Q3, supported by lucrative software and consulting contracts.
• IBM stock appears poised to break out from a rising wedge pattern, potentially challenging its all-time high near $200.

International Business Machines Corporation

Shares of IBM (IBM), a leader in computing and business services, climbed up to 8% pre-market Thursday after the company reported stronger-than-anticipated Q4 earnings and raised full-year revenue expectations. This growth is primarily driven by increased adoption of its artificial intelligence (AI) offerings and consulting expertise.

IBM posted adjusted earnings of $3.87 per share for Q4, exceeding analyst estimates of $3.78, marking an 8% year-over-year increase. Revenue reached $17.38 billion, surpassing forecasts of $17.30 billion and reflecting a 4% rise compared to Q4 2022.

The revenue boost was largely attributed to IBM's infrastructure segment, which saw a 3% increase year-over-year due to rising demand for AI-supportive servers and storage solutions. Notably, the distributed infrastructure category grew 8%, driven by strong sales of IBM's Power processing chips. Additionally, the generative AI business doubled since Q3, benefiting from several high-value software and consulting deals.

Looking ahead, IBM projects full-year 2024 revenue growth between 4% and 6%, outpacing analyst expectations of 3%. Despite anticipating ongoing economic challenges, the company expects technology budgets to remain stable, supporting continued corporate spending.

Since May last year, IBM shares have maintained a consistent upward trajectory, with only one notable pullback to the 200-day moving average in October. Currently, the stock is nearing a breakout from a rising wedge pattern, which could propel it to a 10-year high. The $200 mark may act as resistance, coinciding with the record high set in March 2013.

Disclaimer: The views expressed here are for informational purposes only and do not constitute financial advice. Please review our warranty and liability disclaimer for more details.

As of this article's publication, the author does not hold any positions in the securities mentioned.

Explore useful articles in Markets News as of 30-01-2024. The article titled " IBM Stock Rockets as AI-Driven Revenue Growth Fuels Optimism—Crucial Price Points to Watch " offers in-depth analysis and practical advice in the Markets News field. Each article is carefully crafted by experts to provide maximum value to readers.

The " IBM Stock Rockets as AI-Driven Revenue Growth Fuels Optimism—Crucial Price Points to Watch " article expands your knowledge in Markets News, keeps you informed about the latest developments, and helps you make well-informed decisions. Each article is based on unique content, ensuring originality and quality.