The beat was real. The party, not so much.
IBM turned in a solid Q1: earnings of $1.91 per share beat the Street’s $1.81 estimate, and revenue came in at $15.92 billion versus the $15.62 billion consensus. On paper, that’s a clean win. In the stock market, though, clean wins sometimes get treated like your friend’s “healthy” dessert — nice, but not exactly thrilling.
What actually moved the needle
The company said revenue rose 9% year over year, with software up 11%, consulting up 4%, and infrastructure up 15%. Gross margin and pre-tax margin also improved, which is the kind of boring-but-important stuff that usually makes long-term investors nod approvingly over coffee.
The catch: expectations are doing pushups
IBM also said it expects more than 5% constant-currency growth and about $1 billion more in year-over-year cash flow in 2026. That’s the real backdrop here: investors aren’t just grading the quarter, they’re judging the sequel. If IBM can keep the AI/software narrative humming while throwing off more cash, the market may eventually stop acting like every earnings beat is just a warm-up lap.
Big picture
The headline is simple: IBM beat, but the stock dipped 6.46% in after-hours trading to $235.60. That’s a reminder that a good quarter is only good enough if it also improves the next few quarters — because Wall Street has the attention span of a goldfish with a terminally online portfolio.