IBM stock took a hit in the third quarter of 2024 as the company reported earnings that fell short of Wall Street expectations. The tech giant’s revenue missed consensus by $110 million, causing a nearly 7% drop in its stock price. While IBM did report adjusted earnings per share that beat estimates, the slow revenue growth was a cause for concern for investors.
The only segment that showed growth for IBM was software, which expanded by nearly 10% year over year to $6.5 billion. However, other segments such as infrastructure, financing, and consulting saw declines in sales compared to the previous year. This lackluster performance led to Morgan Stanley lowering its price target on IBM shares from $217 to $208.
IBM CEO Arvind Krishna acknowledged the challenges ahead, stating that the company expects fourth-quarter revenue growth to be similar to the third quarter. With the stock already up more than 32% for the year, analysts anticipate a potential pullback that could take IBM shares down to the $200 mark, which has served as both resistance and support in the past.
Investors will be closely monitoring IBM’s performance in the coming quarters to see if the company can turn things around and boost its revenue growth. With technology companies facing increasing competition and challenges in the current market environment, IBM will need to focus on innovation and strengthening its core segments to regain investor confidence. Time will tell if IBM can bounce back from this latest setback and deliver better results in the future.
