IBM stock rises after Q2 beat enhanced by AI bookings

IBM's (IBM) AI bookings grew by over $2 billion in the second quarter, contributing to its earnings beat reported on Wednesday. Synovus vice president and senior portfolio manager Dan Morgan told Yahoo Finance that International Business Machines just has "a different strategy towards AI and cloud than a lot of these other companies do."

The Morning Brief team examines IBM's earnings figures out from its software and generative AI segments.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Luke Carberry Mogan.

Video Transcript

Time for some trending tickets first up.

Let's take a look at IBM.

You're looking at gains in the pre market trading of just over 1%.

Now this move comes after IBM reported bookings for its A I business rose above $2 billion since mid 2023.

The company also see revenue rise nearly 2% from a year ago.

Some of that was driven by a 7% jump in its software business.

Software business was a stand out here in the most recent quarter, digging into where some were some more of that strength came into the Watson side of the business.

I mentioned the topping $2 billion.

Now this gen I platform launched last year.

So when you take into account how much it has risen, how quickly it has really been able to generate some momentum within that business.

Obviously something that the street welcomes here.

But again, overall revenue rise of 2% software revenue again though increasing about 7% in the most recent quarter, Diaz and I think the focus is on Gen A and interesting note by Morgan Stanley saying uh Gen A I consulting is cannibalistic to other consulting projects.

So really just kind of taking over within organizations.

Uh Another comment by R BC, the gen A I Book of Business grown to over $2 billion to your point.

Uh Since Watson X launched a year ago ahead of expectations in our view, um price targets moving up, Morgan Stanley's to 100 and 82 from 179 over at RB see to a 211 from 200.

And if we go to the Wi Fi Interactive, just wanna chart this real quickly.

This is a five year look and you can see we just broke to the upside relatively recently, but put a 20 year chart on.

And this is just uh this is a very long term breakout from a long term consolidation.

It's a textbook chart.

You don't usually see play out on a time frame as long as this as this.

But uh nevertheless, there you go, nice breakout to the upside recently.