IBM jumps 13%, notches best day since 2000 on strong earnings

IBM surged 13% Thursday on the back of a strong fourth-quarter print that showed artificial intelligence growth boosting its software business.

The move pushed the stock to its best day since July 20, 2000, when shares popped a little over 13%.

The company reported adjusted earnings of $3.92 per share on $17.55 billion in revenue after the bell Wednesday. Analysts polled by LSEG had expected earnings to come in at $3.75 per share and revenues to reach $17.54 billion.

IBM reported a 1% rise in revenues overall, while its software unit grew 10% on a year-over-year basis amid growing demand for AI and its operating system known as Red Hat Linux. CEO Arvind Krishna also said the company posted $5 billion in bookings for its generative AI segment.

“We closed the year with double-digit revenue growth in Software for the quarter, led by further acceleration in Red Hat,” he said in a statement. “Clients globally continue to turn to IBM to transform with AI.”

JPMorgan analyst Brian Essex maintained his neutral rating on IBM but said the firm remains “encouraged” by its software strength and growth trajectory. Goldman Sachs analyst James Schneider reiterated his buy rating, saying software strength should benefit IBM’s turnaround plan.

Shares of IBM have gained 16% since the start of the year.