International Business Machines (NYSE:IBM) stock gained 8.3% in yesterday’s extended trading session following the release of its fourth-quarter results. The company reported better-than-expected revenue and earnings, driven by strong demand for its hybrid cloud and artificial intelligence (AI) offerings.
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IBM is a multinational technology and consulting company known for its expertise in providing hardware, software, and cognitive computing solutions.
Q4 Earnings Snapshot
The company’s adjusted Q4 earnings increased 7.5% year-over-year to $3.87 per share and surpassed the consensus estimate of $3.79. Meanwhile, net revenue increased 4% to $17.4 billion and came in above the Street’s estimate of $17.3 billion.
The top line benefited from a 6% growth in Consulting revenue, a 3% rise in Infrastructure revenue, and a 3% increase in the Software unit. The company revealed that its cloud-based generative AI and data platform, WatsonX, and other AI offerings witnessed sequential growth in the fourth quarter.
For the full year 2024, IBM projects mid-single-digit revenue growth. It also expects to generate $12 billion in free cash flow.
Is IBM a Buy, Sell, or Hold?
Wall Street analysts have a Hold consensus rating on IBM stock based on five Buys, six Holds, and two Sells assigned in the past three months. The average price target of $163.85 per share implies 5.8% downside potential. Shares have gained 29.7% in the past year.
