IBM Delivers Strongest Revenue Growth in Years on AI Consulting Demand
While everyone counted out the old tech veteran, IBMIBM quietly built a cash pile. Big Blue’s stock surged 5% Thursday after posting its best revenue growth in years and highest free cash flow in over a decade. The blockbuster quarter proved the perks of selling shovels during an AI gold rush.
- IBM crushed earnings at $4.52 per share while revenue reached $19.7B — both topping analyst estimates, plus 2026 guidance of 5%+ sales growth.
- Q4 sales rose 9% overall as software and infrastructure surged double digits — with mainframe sales skyrocketing 67% on booming AI demand.
Cash is king: While hyperscalers risk billions on infrastructure commitments, IBM is minting money through billable hours. Its generative AI book of business doubled to $12.5B, with roughly 80% of that coming from AI implementation work that generates real cash today — not intangible commitments. Still, at 27x earnings for modest growth,IBM trades like a hyperscaler without the trajectory, making this a prove-it story for anyone paying premium multiples on a consulting wrapper.