IBM's consulting growth reflects client demand for AI-enabled transformation, but the risk is that clients grow wary of their AI spending returns and cut back. Consulting revenue grew 2% in the third quarter of 2026 excluding currency moves, and brought in $21.1 billion in fiscal 2025, about 31% of IBM's total revenue and second only to Software at $30.0 billion. On the October 21, 2026 call, some analysts asked about AI, and one raised the doubt that clients may have held back on deals after finding some AI systems could not do what was claimed. Management said the productivity gains from AI are very real and expects consulting revenue growth to pick up to low to mid-single digits in 2026, while not yet commenting on 2027 software growth. The article says the number to watch is consulting revenue growth against that 2026 guidance in IBM's next report, expected in January 2027.
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