IBM {{ m-tag option="price" ticker="IBM" currency="USD" }} recently reported a robust earnings performance for Q2 2024, showcasing an adjusted earnings per share of $2.43 on sales of $15.77 billion, exceeding analyst expectations of $2.18 per share on $15.62 billion. This marks an 11.5% increase in earnings per share and a 2% rise in sales compared to last year.
‍Software sales surged by 7%, compensating for a 1% decline in consulting revenue. IBM's optimistic outlook includes surpassing its $12 billion free cash flow guidance for 2024 and maintaining mid-single-digit revenue growth.
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Stock Performance
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The company’s stock saw a 2% uptick after-hours trading, reflecting investor confidence bolstered by its AI initiatives. IBM’s stock has gained 14.8% year-to-date, outperforming the broader S&P 500, although it remains 5% below its March high of near $199.

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AI Initiatives Drive Growth
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The company has been expanding its WatsonX platform, which facilitates the deployment of chatbots and the enhancement of AI programs. Additionally, the open-sourcing of its Granite family of AI models has further entrenched its position in the AI market. The AI Book of Business, representing a blend of bookings and actual sales, has grown to $2 billion, with $1 billion added in Q2 alone.
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IBM's association with AI dates back to its Jeopardy!-winning Watson supercomputer, and it continues to capitalize on this legacy through enterprise AI services under WatsonX. The firm’s AI-related initiatives have driven a rally in its stock, contributing to a year-to-date gain of about 12%.
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The ongoing investment in AI relates to new product development and enhancing existing services. The WatsonX platform exemplifies this approach, allowing businesses to deploy sophisticated AI-driven solutions efficiently. This strategy has helped IBM maintain its competitive edge in a rapidly evolving tech landscape.

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