IBM Eyes $1.81 EPS and $15.64B Revenue on AI and Automation Momentum
Analysts project adjusted EPS of $1.81 and revenue of $15.64 billion, up from $1.60 and $14.54 billion last year, driven by software and infrastructure growth. Red Hat revenue growth slowed to 8% from 12% last quarter, but IBM guided a return to double-digit expansion in 2026 while expanding AI and automation solutions.
1. Earnings Expectations
IBM is set to report adjusted EPS of $1.81 and revenue of $15.64 billion, reflecting year-over-year increases from $1.60 and $14.54 billion a year ago. Strength in software and infrastructure segments, notably automation and transaction processing, underpins expectations of a potential quarterly beat.
2. AI and Automation Expansion
The company has expanded its AI and automation tools into government environments with multiple FedRAMP-authorized solutions on AWS GovCloud and rolled out new cybersecurity offerings to address advanced threats. These initiatives underscore IBM’s push to leverage artificial intelligence for revenue growth across its portfolio.
3. Red Hat and Hybrid Cloud Performance
Growth for Red Hat-related hybrid cloud services eased to 8% from 12% in the prior quarter, but management guided for a return to double-digit growth in 2026. Investors will watch commentary on momentum drivers like COBOL modernization partnerships and quantum computing developments.
4. Analyst Ratings and Price Targets
Analysts at RBC Capital Markets and Wedbush maintain Outperform ratings on IBM, each setting a $330 price target after revising forecasts. While RBC lowered its target from $361, both firms highlight durable demand in software and infrastructure as key support for estimates.