IBM has recently reported a notable increase in its quarterly revenue, a development largely attributed to the growing demand for artificial intelligence consulting and software solutions. The company’s stock rose by 8% to $228.63 in after-hours trading following the announcement.
A significant factor in IBM’s success is its adoption of an open-innovation approach in its AI strategy. By making its source code public, IBM has positioned itself as a cost-effective and scalable option for businesses seeking AI solutions. This strategy has been validated by the success of companies like DeepSeek, which have demonstrated the potential of open-source models in achieving high performance.
In the fourth quarter, IBM’s revenue increased by 1% to $17.55 billion. This growth was driven by AI consulting and software models. Although there was a 2% decline in consulting revenue to $5.18 billion, higher software revenue offset this decrease. The company posted a net income of $2.92 billion, or $3.09 per share. Adjusted earnings were $3.92 per share, surpassing analyst expectations.
Infrastructure sales experienced a nearly 8% decline but are expected to recover with new hardware releases planned for midyear. Looking ahead, IBM has forecasted at least a 5% revenue growth in constant currency and approximately $13.5 billion in free cash flow for 2025.
IBM’s recent performance underscores the increasing importance of AI in driving business growth. The company’s commitment to open innovation and its focus on AI consulting and software solutions have positioned it well to capitalize on the expanding AI market.
