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].

Core Insights - IBM announced a partnership with AI startup Anthropic to enhance its software portfolio with generative AI capabilities, leading to a significant increase in its stock price [1][6] - The collaboration will integrate Anthropic's Claude large language models into IBM's software offerings, starting with tools for software development [2][4] - IBM's Watsonx Orchestrate was highlighted, featuring over 500 tools for businesses to deploy customized AI agents [4] Company Developments - The partnership with Anthropic is part of IBM's broader strategy to compete in the enterprise AI market, where it faces competition from major players like Amazon, Microsoft, Oracle, and Salesforce [5] - Anthropic is positioning itself as a strong competitor to OpenAI, with recent product releases aimed at automating coding tasks [3] Stock Performance - IBM's stock rose nearly 5% in premarket trading, indicating a potential breakout above a previous buy point, and returning to record highs for the first time since late June [6] - After a slump following Q2 results, IBM's stock rebounded with a 16% gain in September and a 3% increase in October, leading to a year-to-date performance of 31.6%, outperforming the S&P 500 [7]