IBM’s Mixed Earnings Report Highlights Market’s High Expectations for Tech
IBM shares dipped despite surpassing third-quarter earnings and revenue estimates, as investors fixated on slowing growth in its cloud division. The tech giant reported adjusted earnings of $2.65 per share, a 15% year-over-year increase, and revenue of $16.3 billion, up 9%. Yet, the stock fell as much as 8% intraday before paring losses to 1.5%.
Bank of America maintained its "Buy" rating, calling the quarter "clean," but softness in IBM's software segment overshadowed the results. The reaction underscores the market's heightened scrutiny of tech earnings, particularly for cloud-related performance. With five trillion-dollar tech giants reporting next week, IBM's slide serves as a cautionary note about investor expectations.