Core Insights - IBM has reported stronger-than-expected fourth-quarter results, with shares climbing approximately 35% over the past year [1] - The company's growth is significantly driven by artificial intelligence (AI) and quantum computing initiatives [2] Financial Performance - IBM's revenue grew by 12%, or 9% in constant currencies, reaching $19.69 billion, surpassing the consensus estimate of $19.23 billion [3] - Adjusted earnings per share (EPS) increased by 15% to $4.52, exceeding analyst expectations of $4.32 [3] Revenue Breakdown - Infrastructure revenue led growth with a 21% increase to $5.1 billion, attributed to the Z17 platform processing 50% more inference operations than the Z16 platform [5] - Software revenue rose by 14% to $9 billion, while consulting revenue increased by 3% to $5.3 billion [6] - The company anticipates software revenue growth of 10% this year, with Red Hat OpenShift expected to grow around 30% [6] Cash Flow and Acquisitions - IBM generated free cash flow of $14.7 billion, with expectations to increase this by about $1 billion by 2026 [7] - The company is actively using its cash flow for acquisitions, currently integrating HashiCorp and planning to close the acquisition of Confluent [8] Quantum Computing Progress - IBM introduced its 120-qubit Nighthawk system and is on track to launch a fault-tolerant quantum computer by 2029 [9] - The company projects revenue growth of more than 5% in constant currencies for 2026, slightly above analyst expectations [9] Valuation - IBM's stock is trading at a forward price-to-earnings (P/E) ratio of around 25 times 2026 analyst estimates, indicating reasonable valuation [10] - The company is positioned as a leader in AI and quantum computing, making its stock a solid investment at current levels [10]