IBM stock fell 16.5% over the year to November 3, 2026, while the S&P 500 returned 11.9%, even as its software growth accelerated in fiscal Q3 2026. Software revenue rose 9% at constant currency, four points faster than in Q2, and high-value annual recurring revenue grew 8% to $24.9 billion. Management attributed about three-quarters of the speed-up to net new business and the rest to large deals that slipped out of Q2, and said double-digit growth in transaction processing may not hold. Red Hat revenue grew 11% in fiscal Q3, and OpenShift reached a $2.4 billion annual recurring revenue business growing more than 30%. IBM reports results in January 2027, when management has said it will provide 2027 figures.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
IBMsoftwarecloud computingearnings
Open a keyword to see other news on the same topic.
Related news
- IBM Plummets 18.5% in the Past Year: Time to Reassess the Stock?
IBM shares have fallen 18.5% over the past year, against 81.3% growth for the industry, amid macroeconomic challenges and a threat from Anthropic's AI. The article says Anthropic's Claude Code can reportedly modernize legacy COBOL systems, which could reduce enterprises' reliance on providers like IBM and compress pricing power in its Consulting segment. Over the same period, Microsoft gained 2.2% and Amazon was roughly flat. The article also cites margin pressure from competition with Amazon Web Services and Microsoft Azure, foreign exchange volatility, integration risks from acquisitions and high leverage. On the other side, demand for hybrid cloud and AI is seen as a likely driver, and earnings estimates for 2026 rose 1.5% to $12.41 and for 2027 rose 1.3% to $13.24 over the past year.
- Is IBM Worth Buying as Software Growth Meets a Premium Valuation?
IBM is showing stronger software execution, cash generation and profitability, but its stock already trades above its longer-term valuation norm, making the setup more demanding for new buyers. Software revenue rose 9% year over year at constant currency in Q3 2026, with Red Hat up 11%, Data up 20% and annual recurring revenue up 8% to $24.9 billion, and management now expects 2026 Software revenue growth of 7%-8%. IBM generated $7.8 billion of free cash flow in the first nine months of 2026 and returned $4.8 billion to shareholders through dividends, yet Consulting revenue grew only 2% at constant currency. Generative AI made up about 30% of Consulting revenue and 35% of Consulting backlog, and the trailing 12-month book-to-bill ratio stayed above 1.0, but converting that backlog into profit remains the key test. Competitive cloud growth from Microsoft and Oracle, along with elevated debt, keeps the case selective.
- IBM (IBM) Introduces Llm D 1.0 For Enterprise AI Inference
International Business Machines and partners Red Hat, Google Cloud, CoreWeave and NVIDIA have introduced llm-d 1.0, an open source inference platform for large language models. The project is governed by the Cloud Native Computing Foundation and is designed for scalable, cost-focused LLM inference in enterprise environments across industries. The article says the launch fits IBM's existing focus on software and hybrid cloud, but for it to matter financially, investors would need to see llm-d reflected in concrete metrics such as AI-related annual recurring revenue.
- What Could Lift IBM Stock?
IBM shares returned 17.4% from September 30 to October 29, 2026, against 1.0% for the S&P 500, though holders were still down 15.2% over the year. A Trefis scenario assuming 8.5% annual revenue growth for three years would lift the shares about 18.8% before dividends, and the article stresses this is arithmetic rather than a forecast. Growth has depended heavily on software, which provided $2.9 billion of the $4.7 billion increase in fiscal 2025 revenue, while third-quarter 2026 reported revenue rose 4.7%, below the scenario's pace. The scenario would return nothing if revenue grew 2.5% a year, or if year-three net margin fell to 12.5% from 16.0% over the past twelve months, and IBM's diluted share count rose 3.2% over three years. The number to watch is revenue growth in the fourth-quarter report, expected in January 2027.
- IBM Continues to Plug Along, but Its Quantum Computing Bet Could Be the Real Catalyst
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.
- Are You Overpaying For IBM Stock Versus Its Rivals?
IBM trades at 21.4 times earnings, the second-highest valuation among five companies that also include Microsoft, Alphabet, Amazon.com and Accenture, yet it ranks fourth of the five in revenue growth over the latest four fiscal quarters. Compared with Accenture at 17.9 times earnings, IBM has a higher operating margin (18.3% versus 15.8%), while revenue growth is nearly even (6.8% versus 6.5%). IBM's software business, its largest, grew 10.6% to $30.0 billion in fiscal 2025, faster than its consulting arm, which grew 1.8% to $21.1 billion, and software growth reached 9% at constant currency in fiscal Q3 2026. Management kept its 2026 revenue growth forecast at 4% to 5% and expects software growth of about 7% to 8%, but said about a quarter of the software pickup came from large deals that slipped from the second quarter and that double-digit growth in transaction processing will not continue. The article argues that IBM's price appears to assume software keeps outgrowing the company as a whole long enough for overall growth to catch up.
Related markets
Latest news
- The US Shifts After the Election: Ukraine Gains Hope, Iran Stands at a Crossroads
Democrats won control of both the House and Senate in the midterm elections, which could shift US policy on Iran, Israel and Ukraine. Two sources told Reuters the risk of a new full-scale US attack on Iran after the vote has fallen, though a heavy Republican defeat could make Tehran more confident. On Ukraine, Democrats could propose new aid that might override Trump's veto with a two-thirds majority, though this would be slow to pass. Oil prices fell for three straight days, but low inventories are seen limiting further declines. Analysts also say the election could give some Asian countries reason to delay investment pledges made to avoid tariffs.
- Dow Jones Futures Rise, But Techs Tumble; Apple, Microsoft, Amazon Flash Buy Signals In Postelection Rally
Stocks surged after the elections and a sharp drop in oil prices. Shares across many sectors show buy signals, but the article also points to one area to avoid.
- Why Accel Entertainment Was a Huge Winner on Wednesday
Accel Entertainment (ACEL) shares rose 13.15% on Wednesday after third-quarter results beat analyst estimates. Revenue grew 10% year over year to almost $364 million, and adjusted (non-GAAP) net income rose 12% to more than $18 million, or $0.22 per share, above forecasts of under $357 million and $0.17 per share. Growth came mainly from more gaming machines, which rose 7% to 29,548 across 4,705 locations (up 6%), with strong performance in Georgia, Nebraska and Illinois. The author views the company's business model as straightforward and reliably profitable, with positive cash flow.
- ACB Fund Offers ACBC Smart Bond Fund Certificates to the Public, Minimum Investment 1 Million VND
ACB Fund Management Company Ltd. (ACBC) announced a public offering (IPO) of certificates for the ACBC Smart Bond Fund (ACBC-SFUND), under registration certificate No. 657/GCN-UBCK. The offering runs from November 6, 2026 to January 15, 2027, with a minimum of 5 million certificates to be sold at a par value and offering price of 10,000 VND each. Investors can buy at least 100 certificates, equal to 1 million VND. The offering may close early if it simultaneously reaches at least 50 billion VND in registered value, at least 100 investors (excluding professional securities investors), and an investor registration period of at least 20 days; ACBC will announce the closing date at least 3 working days in advance. The certificates are distributed through ACBC and Fincorp JSC.
- Why Duolingo Stock Skyrocketed Today
Duolingo shares (DUOL) jumped 26% on Wednesday after the popular learning app operator reported a sharp rise in users. Daily active users climbed 29% to 64.9 million in the third quarter, faster than the 23% growth in the second quarter and 21% in the first. Paid subscriber growth was slower at 14%, while revenue rose 14% to $309 million and operating cash flow increased 6% to $89.4 million. CEO Luis von Ahn said the company is prioritizing teaching quality and user growth, and Duolingo raised its full-year forecast, now expecting 2026 revenue to rise 18% to $1.2 billion. The article says the upbeat guidance eased investor concerns about AI-driven threats.
- 6-month currency swap: Supporting liquidity, easing interest rate pressure
Mr. Nguyễn Thế Minh, Director of Investment Banking at ABS Securities, views the State Bank of Vietnam's 6-month foreign currency–VND swap operation as a suitable measure to support VND funding for credit institutions as interbank rates have trended upward. Exchange rate pressure has eased significantly compared with last year, creating favorable conditions for the operation. The relatively favorable swap cost could help banks balance liquidity and ease short-term interest rate pressure, while household deposits have recently risen. However, the maximum size of USD 2 billion and the 6-month tenor mainly address temporary liquidity needs and do not solve long-term funding issues.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.