What Happened?
Shares of technology and consulting giant IBM (NYSE: IBM) jumped 3.6% in the afternoon session after the company reported fourth-quarter results that beat Wall Street estimates and offered a strong financial outlook for the upcoming year. The technology and consulting giant's revenue grew 12.1% year-over-year to $19.69 billion, while its adjusted earnings of $4.52 per share also topped expectations. The company's performance was lifted by its Software segment, which has consistently outperformed its total sales. Looking ahead, IBM projected constant currency revenue growth of more than 5% for 2026 and an increase of about $1 billion in year-over-year free cash flow, signaling confidence in its future performance. The positive results and upbeat guidance were well-received by investors.
After the initial pop the shares cooled down to $304.75, up 3.6% from previous close.
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What Is The Market Telling Us
IBM’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 9 days ago when the stock dropped 3.2% on the news that geopolitical tensions between the United States and the European Union escalated, sparking fears of a renewed trade war.
The broader markets adopted a "risk-off" mode, with investors seeking safe-haven assets amidst the uncertainty. The market's primary fear gauge, the VIX, jumped to a fresh eight-week high, signaling rising investor anxiety. The dispute, centered on Greenland, raised the possibility of a revived trade conflict, which could disrupt global supply chains and economic activity. Mega-cap technology stocks, many of which have significant international sales and operations, were particularly affected by the souring risk sentiment as a potential trade war threatens their global business models.
IBM is up 4.5% since the beginning of the year, and at $304.75 per share, it is trading close to its 52-week high of $314.98 from November 2025. Investors who bought $1,000 worth of IBM’s shares 5 years ago would now be looking at an investment worth $2,559.
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