Articles Tagged: red hat

2 articles found

IBM After Q3: Will AI Services and Red Hat Cross‑Sells Turn Revenue Beats into Durable Margin Gains?

IBM’s third quarter delivered what bulls wanted to see on the surface: revenue and EPS ahead of expectations, an upsized full-year free cash flow outlook, and a sharply larger AI opportunity set. Yet the stock’s initial pullback after the print underscored a tension that has dogged the story for years: how quickly headline growth can translate into sustained, higher-quality margins. With software once again outgrowing the company average and a rising “AI book of business,” the next several quarters will hinge on mix — and whether AI services act as an accelerant for Red Hat platform adoption and higher-margin, recurring software. This piece examines IBM’s Q3 results, the mix and margin question behind the initial market reaction, and the strategic pathways to operating leverage through AI services and Red Hat cross-sells. It also benchmarks IBM against a relevant peer read‑through from SAP’s AI-driven backlog, and lays out scenario pathways and KPIs for investors to track into year-end and 2026.

IBMInternational Business MachinesQ3 earnings+12 more

IBM’s $240 reset: why a 19% drawdown is forcing a harder look at cash conversion, leverage, and the AI promise

International Business Machines shares have slipped to roughly $240, nearly 19% below their 52‑week high of $296.16, as investors reassess the durability of its AI-led narrative and the quality of cash generation behind it. According to Yahoo Finance, the stock has fallen about 16% over the past month on elevated volumes, with a pronounced downdraft around the late‑July earnings window. The stakes are clear: IBM is asking investors to pay up for a higher-quality, software‑heavy portfolio, while the market is demanding near-term cash flow that comfortably funds a sizable dividend and services a large debt stack. The company’s latest quarterly filing shows healthy operating margins but softer cash conversion, a combination that has energized skeptics just as enthusiasm for “enterprise AI” has grown more discriminating. Bulls and bears now agree on one thing—execution over the next two quarters matters more than slideware. This article reconstructs the price action, reconciles it with the SEC‑filed fundamentals, and weighs the Street’s longer‑dated expectations against the nearer‑term evidence.

IBMInternational Business MachinesAI+17 more