IBM reported third-quarter revenue up 5% to $17.1 billion, above the $16.82 billion consensus compiled by LSEG, and adjusted EPS rose 11% to $2.95 versus $2.86 expected by analysts. Consulting was flat, infrastructure rose 4%, the z17 mainframe fell 20%, and software climbed 8%, with Red Hat up 11%; IBM still targets 4% to 5% revenue growth for the year. The company is betting on quantum computing, projecting a fault-tolerant quantum computer by 2029 using qLDPC error-correcting codes, signing 16 quantum enterprise agreements this year, and advancing to Stage C of DARPA's Quantum Benchmarking Initiative. IBM trades at a forward P/E of 19 based on 2027 estimates, which the author reads as investors assigning some value to its quantum ambitions. The author views quantum as the main reason to own the stock and considers IBM a fitting part of a broader basket of quantum computing stocks.
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