IBM Shares Face Pressure Despite Strong Software Performance

IBM delivered a financial report that left investors with mixed emotions. While the technology giant demonstrated impressive strength in its software division and artificial intelligence business, concerning weaknesses emerged in consulting and infrastructure segments, sending shares tumbling in after-hours trading.

The third quarter painted a picture of two different companies within IBM. On one hand, the software unit delivered outstanding results with revenue climbing 10% to reach $6.52 billion, significantly outpacing analyst projections. The 2019 acquisition Red Hat proved particularly valuable, accelerating to 14% growth—double its pace from the previous quarter.

Software now represents nearly 45% of IBM’s total revenue and boasts an impressive gross margin of 83%, establishing itself as the corporation’s premium segment. CEO Arvind Krishna emphasized the division’s... Read more...