IBM announced new solutions developed in collaboration with Adobe, where AI is used to improve the customer experience in industries such as airlines & healthcare. The idea is to understand customer needs faster and then act accordingly. This allows companies to provide better service, save money, and improve customer engagement.
The same thing happened to me with IBM as with ServiceNow: it looked good to me, but then the sharpest and smartest minds noticed something. The results exceeded expectations on almost every front; sales were particularly strong in the software and cloud services segments, which was directly reflected in the bottom line.
Consulting fell slightly short of targets, but overall the performance remained strong due to efficiency measures. Management expressed satisfaction with the company’s progress—as expected—and believes the pace will accelerate even further. There is a cash buffer, and the future outlook appears decent regarding both revenue and free cash flow.
Then it was highlighted in the news and elsewhere that investors are spooked by AI. The market also seemed concerned that the company didn’t raise its full-year guidance, and investors fear that new technology (AI, etc.) will displace traditional software firms. But general uncertainty dragged the entire sector down anyway.
https://x.com/earnings_guy/status/2047044856929808824
The company’s own materials
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IBM CEO Arvind Krishna interviewed by Nicolai Tangen of the Norwegian Oil Fund. Duration 57 min.
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