IBM stock slides over 5% despite earnings beat, analyst target hikes - software growth faces 2027 test. Published: Oct 22 2026, 04:05 PM IST * FB * TW * Linkdin * Whatsapp * GNFollow Us IBM's software revenue increased 8% year over year to $7.8 billion, while Transaction Processing returned to 9% growth after declining 8% in the second quarter. * Jefferies raised its IBM price target, but said sustaining near-double-digit software growth in 2027 would require stronger organic execution in automation and data. * Morningstar lifted its fair value for IBM stock, citing accelerating Red Hat bookings. * Citi also raised its target on the stock to $280 from $245 and maintained a 'Buy' rating. International Business Machines Corp. (IBM) shares fell nearly 6% despite multiple firms raising price targets, as analysts flagged challenges to sustaining the company's software growth momentum into 2027. IBM on Wednesday reported better-than-expected fiscal third-quarter (Q3) results, with revenue of $17.1 billion topping Fiscal.ai's $16.84 billion consensus and adjusted earnings per share (EPS) of $2.95, beating the $2.87 estimate. As of this writing, IBM stock was down nearly 6% in Thursday's premarket and was among the top trending tickers on Stocktwits. Analysts focus on whether IBM's software rebound can last. Jefferies analyst Brent Thill raised IBM's price target to $280 from $270 while maintaining a 'Buy' rating. According to the note cited by TheFly, the analyst acknowledged the rebound in software sales but said the key question was whether IBM could sustain that momentum and achieve near-double-digit software growth in 2027. It would require broader organic execution in automation and data, Thill added. Morningstar analyst Luke Yang similarly identified software performance as the biggest variable driving IBM's stock, particularly as its z17 mainframe enters the middle of its product cycle and consulting demand remains stable. Yang raised Morningstar's fair value estimate to $230 from $225 earlier, citing stronger-than-expected Red Hat bookings growth in the high teens. However, the firm said further acquisitions would be necessary for IBM to achieve management's long-term double-digit software growth target. It forecasts approximately 7% average annual organic software growth over the next five years. Separately, Citi raised its price target to $280 from $245 and maintained a 'Buy' rating, remaining constructive on IBM shares. Barclays also raised IBM's price target to $277 from $262 and maintained an 'Overweight' rating, per TheFly. The firm said the key question is how IBM's stronger third-quarter results translate into fourth-quarter and fiscal 2027 expectations, adding that it views management's guidance commentary as conservative. What IBM's latest quarter revealed. IBM's software revenue increased 8% year over year to $7.8 billion, accelerating from 5% growth in the previous quarter. Transaction Processing returned to 9% growth after declining 8% in the second quarter. Meanwhile, Red Hat grew 11%, and Data revenue increased 19%, although Automation declined 3%. Morningstar attributed a 210-basis-point expansion in the software segment's profit margin to productivity improvements. IBM also raised its full-year software revenue growth outlook to about 7% to 8% from 6% to 8%, while maintaining its companywide constant-currency revenue growth forecast of 4% to 5%. The company increased its full-year free cash flow growth expectation to more than $1 billion, from approximately $1 billion previously. Retail investors' sentiment around IBM. Even as the shares slipped premarket, retail investors' sentiment around IBM stock flipped into the 'bullish' territory from 'neutral' a day earlier amid high message volume. So far this year, IBM stock has fallen nearly 14%. By comparison, the ProShares Ultra Nasdaq Cloud Computing (SKYU) and the State Street Technology Select Sector SPDR ETF (XLK), which hold the stock, have risen around 50% and 31%, respectively, over the same period. Stay updated with all the latest Business News, including market trends, Share Market News, stock updates, taxation, IPOs, banking, finance, real estate, savings, and investments. Track daily Gold Price changes, updates on DA Hike, and the latest developments on the 8th Pay Commission. Get in-depth analysis, expert opinions, and real-time updates to make informed financial decisions. Download the Asianet News Official App from the Android Play Store and iPhone App Store to stay ahead in business. 0 Comments / 0 New

IBM sinks 7% as CEO's AI spending caution overshadows earnings beat; Accenture and infosys ease back. IBM's CEO just raised a red flag about AI spending that rattled investors and rippled through the entire tech sector, even as the company posted a clean earnings beat. The question is whether his warning signals a broader shift in... A quarter that topped Wall Street forecasts on revenue and adjusted earnings is drawing sellers into International Business Machines (NYSE:IBM | IBM Price Prediction), as an unchanged full-year outlook and pointed artificial intelligence (AI) commentary from the chief executive set the tone. IBM stock is down 7% to $233.50 in morning trading. Today's selling pressure is powerful in the technology sector. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is down 0.9% on AI spending worries, while the iShares U.S. Technology ETF (NYSEARCA:IYW) is down 2%. Chief executive Arvind Krishna delivered that commentary after IBM reported third-quarter 2026 results on October 21. The company sells the software, mainframes and consulting companies use to implement AI, so his caution reaches across information technology services. Earnings beat collides with an unchanged revenue forecast. Key data−. Previous Close Market Cap Day's Range 52wk Range Dividend Yield IBM's Q3 2026 revenue reached $17.1 billion, ahead of the $16.84 billion estimate. The company's adjusted earnings per share (EPS) of $2.95 also topped the $2.87 consensus. Software revenue at IBM rose 8% to $7.8 billion, accelerating from the prior quarter on 11% growth at Red Hat. That strength didn't change the full-year view, as IBM kept its constant-currency revenue growth forecast at 4% to 5%. The unchanged forecast disappointed investors who had hoped for an increase. Krishna flags AI spending with no real return. On IBM's conference call, Krishna stated that enterprise customers are becoming "a lot more cognizant and a lot more aware of what is the true ROI of all of their AI spend." Clients are also nervous about "some of the AI spending completely out of control with no real return," he added. Krishna framed that shift as an opening, since clients want help redesigning workflows and controlling token spending: "That is the tailwind for us." The steep drop in IBM stock signals that the warning is driving the reaction. Free Report, Just Released Why Didn't ACN Make The Top 10 List? 24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now. Not the ten biggest companies. Not the ten everyone is arguing about. The ten best stocks to buy right now. And ACN didn't make the cut! The report is free, and you can see why we think each stock is a top investment today. IBM's chief executive also recommended companies to "pick a few" AI initiatives and scale them, warning against running "100 little experiments" that never get enough investment. Riding an AI mania is fine as long as you plan the exit, something we covered in a free handbook on both halves of the trade. Mainframe revenue from IBM Z fell 20% as the product cycle matured, while quarterly free cash flow reached $3.03 billion and management raised its full-year target for that metric to an increase of more than $1 billion. IBM's consulting business grew just 0.2%, a soft spot close to the work Krishna described. Accenture and infosys post milder declines. Meanwhile, Accenture (NYSE:ACN) shares are down 0.5% to $239, a far smaller drop than IBM's. Infosys (NYSE:INFY) stock is down 2% to $12.44, steeper than Accenture but well short of the slide in IBM stock. Both of these companies sell the consulting work Krishna described. So, their softer declines suggest that the damage is mostly contained to IBM stock. IBM's software outlook faces its next test. IBM's fourth-quarter results will test its software growth. Management expects full-year software expansion of 7% to 8%, with 7% as its revised base case, and double-digit Red Hat gains in the fourth quarter. IBM beat on both lines, accelerated software growth and raised its cash flow goal. Against that are an unchanged revenue forecast, a shrinking mainframe line and total debt of $63.8 billion, up $2.6 billion year to date. Investors considering IBM stock exposure should size their positions carefully given that mix. Got $1,000? Before you buy ACN, read this. If you have cash sitting in your account right now, give this two minutes. After more than two decades of helping investors beat the market, our top analysts at 24/7 Wall St. put together a definitive report on the Top 10 Stocks To Buy Today. And ACN wasn't one of them. They combed the entire market. It's not 10 ideas, not 10 stocks everyone is talking about, it's what their research points to as the 10 best stocks to buy right now, and it's free. Read more here and see which stocks made the list ->> David Moadel David Moadel is financial writer specializing in stocks, ETFs, options, precious metals, and Bitcoin. David has written well over 1,000 articles for leading online publications, helping investors understand markets, income strategies, and risk.His work has appeared in The Motley Fool, InvestorPlace, U.S. News & World Report, TipRanks, ValueWalk, Benzinga, Market Realist, TalkMarkets, Finmasters, 24/7 Wall St., and others.With a master's degree in education, David has taught at the elementary, high school, and college levels. That teaching background shapes his writing style: clear, educational, and practical. David has also built a loyal social-media audience by providing trustworthy financial content on YouTube, X/Twitter, and StockTwits.

Red Hat opens Singapore AI Centre of Excellence as strategic AI innovation hub for Asia Pacific. October 22, 2026 Red Hat, the world's leading provider of open source solutions, introduced Red Hat's APAC AI Centre of Excellence (CoE) in Singapore. Supported by the Singapore Economic Development Board (EDB), the Centre will help organisations evolve from AI experimentation towards production deployment using Red Hat's open source technologies and engineering expertise. Red Hat has established the Centre to meet growing regional demand for trusted, enterprise-ready AI. The CoE's engineering teams will help organisations move AI workflows into production through two complementary paths developing reusable software architectures that address common industry challenges, and contributing code directly to upstream open source projects in an effort to address enterprise requirements in system deployment, runtime optimisation, platform management and more. To harness the CoE's capabilities, the Singapore Defence Science and Technology Agency (DSTA) is collaborating with Red Hat to explore and co-develop AI and cloud-native solutions that strengthen capabilities in these areas and that the DSTA can then apply to defence applications. Basing these engineering capabilities in Singapore shortens the feedback loop between customers, partners and Red Hat's core product teams. This connection helps maintain development roadmaps grounded in customer requirements, accelerates solution delivery and strengthens Red Hat's ability to co-innovate with organisations across the region. Nurturing local talent to promote a thriving AI ecosystem. The AI CoE will give organisations expanded access to Red Hat's AI, hybrid cloud and platform engineering expertise, while strengthening in-region technical capabilities in Singapore. The CoE includes a dedicated innovation team comprising engineers, forward-deployed engineers, architects and project managers all centered on making AI/ML deployments successful in customer environments. The Centre will also support skills development in areas critical to modern AI deployment, including software engineering, automation, cloud-native development and DevSecOps, for customers and partners to strengthen their own specialized internal capabilities. Bringing production necessities into the Centre. Drawing on Red Hat's open-source expertise and DSTA's engineering capabilities and defence domain knowledge, both organisations will jointly develop scalable solutions in AI, cloud computing, application modernisation and edge computing to support multi-cloud operations. This includes jointly establishing architectures and practices for Development, Security and Operations (DevSecOps) and Day 2 operations for AI and cloud systems at scale, across both on-premise and off-premise environments. These efforts aim to accelerate the development and deployment of AI solutions at scale, enabling greater agility for the DSTA in anticipating and addressing evolving defence requirements in the AI era. Red Hat's APAC AI Centre of Excellence aligns with Singapore's National AI Strategy, providing contributions to the country's broader AI ecosystem with talent, technology and real-world use cases. EDB's support for the Centre, Red Hat's open source AI expertise and DSTA's co-engineering collaboration provide a model for translating AI capability-building into practical innovation in Singapore and across Asia Pacific. Supporting quotes. Daniel Aw, Vice President & General Manager, Red Hat Asia Pacific "AI adoption is moving rapidly from experimentation towards execution, and organisations need open platforms and hands-on engineering expertise to make that transition responsibly. Through Red Hat's APAC AI Centre of Excellence, we are expanding that capability in Singapore. EDB's support enables us to grow the Centre here, while our co-engineering with DSTA demonstrates how it can be applied to complex, real-world use cases." Yueh Chinn Seah, Vice President, Digital Industry Singapore "Red Hat's APAC AI Centre of Excellence deepens Singapore's capabilities in open source enterprise AI. The Centre bolsters Singapore's position as a key AI hub creating opportunities for local talent to deepen their engineering capabilities. We are excited to work with Red Hat to scale AI solutions across Southeast Asia and beyond." Gayle Chan, Deputy Chief Executive (Information), Defence Science and Technology Agency "DSTA continually explores new approaches to strengthen the capabilities we deliver for Singapore's defence. Through our collaboration with Red Hat under the AI Centre of Excellence, we look forward to co-engineering and scaling AI and cloud-native solutions relevant to our technology needs for cloud and on-premise environments. As threats become more complex, it is important that we continue to push the boundaries of technology and innovation to stay ahead of the curve."