💼 IBM Q3 results: is the growth of AI worth paying attention to?
IBM (International Business Machines Corporation) is a global technology company focused on innovation in software, artificial intelligence, cloud services and hybrid infrastructure. IBM is one of the so-called technology pioneers, and now the company is helping companies transform their digital operations and increase efficiency, while emphasizing sustainability and an ethical approach to data and innovation.
The company released quarterly results on Wednesday that show dynamic developments in key areas. Software revenue grew by 10 %, driven mainly by strong demand growth in artificial intelligence and the strengthening of Red Hat. Although the software segment posted double-digit growth, consulting revenue was flat and infrastructure revenue declined by 7 %. 🔍
➡️ Q3 KPIs:
Total Revenue: Over $14.8 billion - Slightly less than consensus estimate 15.07 billion USD.
Loss per share: 34 cents From continuing operations.
Cash flow from operating activities: $2.9 billion, with free cash flow of USD 2.1 billion.
Cash and cash equivalents: The quarter closed with USD 13.197 billion.
💡 Arvind Krishna, Chief Executive Officer IBM, said that with double-digit growth in software and successful AI development, the third quarter results are proof of the right strategy. Generative artificial intelligence, which IBM relies heavily on, now accounts for more than 3 billion in the portfolio - an increase of more than 1 billion from last quarter. IBM markets its AI models as powerful, affordable and suited to real customer needs. 🚀
📈 Fourth quarter and full year outlook: IBM estimates fourth quarter constant currency revenue to grow approximately 2 %, primarily due to continued momentum in the software segment. The company confirmed that it plans to achieve free cash flow of $12 billionby the end of 2024 and operating margin growth. Management expects the final quarter of the year to maintain third quarter momentum and build on the positive momentum in AI. 🌍💻
IBM looks like an interesting opportunity, especially in the AI and software growth sector, where the company maintains a solid position and strong cash flow.
What's your take on IBM?
Very good company, the performance is not bad, however the stock is expensive and there are much better opportunities in the market in my opinion.
It's not a bad company, but I've somehow overlooked this company all this time. I don't know why, but I guess I'm more interested in other companies in this sector.
I don't see how this company can have a similar valuation to Google. Who pays this kind of money for 5% EPS growth?
The valuation here is quite nice and the stock has been steadily rising over the long term, which is great. The stock is quite overvalued though, so I'll buy when the stock drops at least a few %.