DIA
Here we go again
IBM is heading into earnings with the kind of setup public companies dream about: analysts expect it to beat, investors want a fresh AI storyline, and the stock has already been doing a little victory lap. The company is scheduled to report first-quarter results Wednesday after market close, and the bar is high in the usual IBM way — meaning, somehow, “please keep proving you’re not the same old IBM.”
The beat streak is doing the heavy lifting
Wall Street is looking for Q1 revenue of $15.64 billion and EPS of $1.81. That’s above last year’s $14.54 billion and $1.60 per share, and it would extend IBM’s run of outperforming expectations if the company keeps the streak alive. Not exactly a bad look for a stock that likes to remind everyone it still has a pulse.
AI, but make it enterprise
The real headline, though, is AI. Wedbush’s Dan Ives says investors may be underestimating IBM’s AI growth, while Bank of America’s Wamsi Mohan thinks the newly closed Confluent acquisition could add even more AI fuel to the story. Add in IBM’s recent collaboration with Adobe around an AI-powered user experience, and you’ve got a company trying very hard to be the grown-up in the room for enterprise AI.
What investors should watch
A few things could move the stock:
- the latest update on IBM’s AI book of business, which was $12.5 billion at the end of Q4
- any guidance tweaks tied to the Confluent deal
- growth trends in Software, Consulting, and Infrastructure, especially consulting after it lagged a bit last quarter
- whether management keeps the double-beat machine chugging along
Big picture: IBM doesn’t need a moonshot here. It just needs to keep looking like an old-school giant that found a new toy and actually knows how to use it.