By
Godfrey Benjamin
January 22nd, 2024
IBM stock added approximately 10% in the past year and has jumped over 5% year-to-date.
International Business Machines Corp (NYSE: IBM) stock jumped more than 3% today in the pre-market trading session to trade around $137.20. IBM just reported its Q1 earnings results that beat analysts’ expectations, thus provoking the spike in stock volatility.
Notably, the company reported adjusted earnings per share of $1.77 versus $1.63 per share as expected by analysts according to Refinitiv. During the first three months of the year, IBM recorded a revenue of $17.73 billion versus $17.35 billion expected by analysts according to Refinitiv.
The company reported an increase in demand for its services for the first three months as more businesses adopt cloud-based operations. Moreover, the pandemic fueled the technology adoption in most industries that use IBM’s core services.
“This quarter, we saw an improved trajectory in project activity and client-based business volumes including in some of the industries most affected by the pandemic such as retail and consumer products,” said Jim Kavanaugh, IBM’s finance chief.
IBM Stock and the Company’s Performance in Q1
As a major technology company, IBM received outstanding reception by investors since the COVID onset. According to metrics provided by MarketWatch, IBM stock added approximately 10% in the past year and has jumped over 5% year-to-date. However, Wall Street analysts are not sure of what to expect from the company in the coming quarters. Notably, IBM stock received an average of Hold rating from 17 ratings according to a survey conducted by MarketWatch.
The uncertainty in IBM’s market outlook revolves around the post covid business behavior. Will businesses and their operations return to normalcy or they will have to adopt the new norm that involves social distancing. Remember IBM significantly benefited from the social distancing aspect as it provides cloud computing services to the global market.
The company has a reported market valuation of approximately $118.47 billion with 893.59 billion outstanding shares. In the past 52 weeks, IBM stock ranged between $105.92 and $137.07. Notably, IBM stock has never completely recovered from last year’s market crash during Black Thursday.
From a technical point of view, IBM stock is currently trading at a critical crossroad that will either determine a new bull market after years of a downtrend or a further dip. The outcome is mostly going to be decided by the company’s fundamentals.
During the first quarter, the company announced that it acquired 7Summits, a leading Salesforce consultancy. “7Summits is part of a broader IBM investment strategy in services and ecosystem partnerships to enable our clients’ digital transformations through hybrid cloud and AI,” said Mark Foster, Senior Vice President, IBM Services. “Salesforce plays a critical role in transforming customer, employee and partner lifecycle processes into intelligent workflows that deliver accelerated business outcomes.”