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Analysts expect IBM earnings to show modest overall growth this quarter, with the software business positioned to potentially exceed Wall Street consensus forecasts and drive momentum into 2026.
Earnings of International Business Machines(IBM) Corporation are anticipated to form one of the highlights this week, as analysts see continued strong first-quarter earnings growth for the company on account of its growing software business.
The anticipated strength in IBM earnings is largely due to the robustness of IBM's software business of IBM. Estimates suggest that IBM earnings could register approximately 11% growth in the software segment this quarter. Although this would be slightly below the growth achieved in the previous quarter, analysts feel that IBM earnings could beat estimates due to positive comparisons and contribution from its recent acquisitions. The estimated growth in Red Hat is seen at 10%.
IBM earnings trends outside software seem relatively balanced. Infrastructure revenues will rise approximately by 8% but at a slower pace compared to the last quarter because of product cycle effects. Consulting revenues should rise by roughly 4%, adding balance but not much acceleration to IBM earnings growth overall.
In terms of the outlook, IBM earnings can see additional gains in 2026 due to synergies from acquisitions and persistent demand for the mainframe system. Moreover, the incorporation of AI technology into business operations might help drive IBM earnings growth down the road.
Nevertheless, some risk regarding the speed of AI deployment into IBM platforms does exist. Business Honor notes that consistent performance and strong software growth might lead to additional IBM earnings upside going forward.
- Sandra Kelembeth
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