By Dean Seal
International Business Machines’ profit rose in the fourth quarter as strong demand for artificial intelligence pushed revenue higher than analysts had expected.
Shares are up 23% over 12 months and rose to a nine-year high of $174.86 in Wednesday trading.
Chief Executive Arvind Krishna said client demand for AI is accelerating and that IBM’s book of business for its generative AI platform Watsonx roughly doubled between the third quarter and the fourth.
Each of the legacy tech giant’s segments reported higher revenue. The biggest gain came from IBM’s consulting business while its infrastructure unit logged a smaller bump.
The top line of IBM’s software business, its largest by revenue, rose 3% to $7.5 billion as growth from its cloud-computing subsidiary Red Hat and smaller gains from automation and AI more than offset a 5% decline from its security division.
IBM’s quarterly report, by the numbers:
-- Revenue rose 4% to $17.38 billion, topping analyst forecasts for $17.29
billion, according to FactSet.
-- Profit jumped to $3.29 billion from $2.71 billion in the same quarter a
year ago.
-- Adjusted per-share earnings, which strip out one-time items, of $3.87
topped analyst forecasts by 8 cents, according to FactSet.