ETFs in Focus on IBM's Q3 Earnings

Core Insights - IBM reported strong third-quarter 2025 results, with adjusted earnings and revenues exceeding expectations, driven by the ongoing AI boom [1][2] - Despite the positive earnings report, IBM's stock fell by 0.9% on October 23, 2025, due to concerns over slower growth in its Red Hat software business [1][4] Financial Performance - Total revenues increased to $16.33 billion from $14.97 billion, surpassing the consensus estimate of $16.1 billion [2] - Non-GAAP net income from continuing operations was $2.65 per share, up from $2.30 in the prior-year quarter, beating the Zacks Consensus Estimate by 21 cents [2] Business Segments - Demand for hybrid cloud and AI solutions remains strong, with IBM's AI business surpassing $9.5 billion, up from $7.5 billion in the previous quarter [3] - The hybrid cloud unit, including Red Hat, saw a 14% increase in sales, which was a slowdown from the previous period and below analysts' expectations of 16% [4] Guidance and Future Outlook - IBM raised its revenue guidance, now expecting "more than" 5% revenue growth, up from "at least" 5% [6] - The company anticipates free cash flow for the year to reach $14 billion, an increase from the previous estimate of $13.5 billion [6] Investment Opportunities - Investors may consider IBM stock through ETFs to mitigate company-specific risks [7] - Several ETFs, such as First Trust NASDAQ Technology Dividend Index Fund and FT Vest Technology Dividend Target Income ETF, have significant allocations to IBM, with 8.6% and 8.56% respectively [8][9]