IBM Stock Near Highs With Earnings Due. Here's What Investors Are Watching.

Core Viewpoint - IBM is set to report its third-quarter earnings, with expectations of growth driven by AI demand and software sales recovery after previous underperformance [1][2][3]. Earnings Expectations - Analysts predict IBM's Q3 earnings will rise 6% to $2.45 per share on an adjusted basis, following a 15% increase to $2.90 in Q2 [2][3]. - Q3 revenue is forecasted at $16.1 billion, reflecting an 8% year-over-year increase, consistent with previous growth rates [3]. Software Segment Performance - Analysts expect Q3 software sales to reach $7.2 billion, marking a 10.5% increase year-over-year, which is critical after two quarters of underperformance [4]. - Consulting revenue is projected to increase 1.7% to $5.2 billion, while infrastructure sales are expected to grow 13.8% to $3.5 billion [5]. AI Initiatives - IBM's recent partnership with AI startup Anthropic aims to integrate Claude large language models into its software portfolio, generating excitement about future growth [6]. - IBM's "AI book of business" has reportedly surpassed $7.5 billion, a significant increase from over $2 billion a year ago [7]. Quantum Computing Developments - Investors are keen on updates regarding IBM's quantum computing efforts, with plans to build a large-scale, fault-tolerant quantum computer by 2029 [9][10]. - The company’s advancements in quantum computing could enhance its market position if a clear roadmap is communicated [10]. Stock Performance - IBM stock has seen a year-to-date increase of over 29%, although it has recently pulled back after reaching a record high of 301.04 [2][11]. - The stock's Relative Strength rating has decreased to 69 from 85 over the past three months, despite outperforming the S&P 500 [12].