IBM(US:IBM) Huan Qiu Wang Zi Xun·2025-10-23 04:08Core Insights - IBM reported third-quarter earnings that exceeded Wall Street expectations in both revenue and profit, but growth slowdown in its key cloud computing software segment raised concerns, leading to a nearly 4% drop in stock price during after-hours trading [1][4]. Financial Performance - Total revenue for IBM in the third quarter reached $16.33 billion, surpassing the analyst average estimate of $16.09 billion [4]. - Adjusted earnings per share were $2.65, exceeding the expected $2.45 [4]. - IBM raised its full-year revenue outlook, now expecting growth of over 5% at constant currency, up from the previous guidance of "at least 5%" [4]. Segment Performance - The infrastructure segment saw a significant revenue increase of 17%, reaching $3.56 billion, driven by demand for new mainframe systems designed for artificial intelligence applications [4]. - The AI business has grown to $9.5 billion, indicating strong market demand [4]. - However, the hybrid cloud segment, particularly Red Hat, experienced a slowdown in sales growth from 16% in the previous quarter to 14% this quarter, raising investor concerns about IBM's ability to capitalize on the cloud and AI integration trend [4][5]. Market Position and Challenges - Despite strong performance in AI and traditional hardware, the slowdown in cloud computing growth signals ongoing challenges in competing with major players like Amazon and Microsoft [5]. - The ability of IBM to balance its traditional strengths with the development of innovative business areas will be crucial for its long-term value [5].