IBM Beats Q3 Estimates But Mainframe Slump Lingers

IBM reported third-quarter adjusted earnings of $2.95 per share, beating Wall Street's $2.86 forecast, with revenue rising 5% to $17.1 billion. Software led growth at 8%, while consulting was flat and infrastructure rose just 4%. AI now accounts for 30% of consulting revenue and 35% of the order backlog, though consulting gross margins narrowed. IBM reaffirmed full-year revenue growth guidance of 4% to 5%, disappointing investors hoping for an upgrade after Q2's mainframe-driven miss that sent the stock down more than 25% in a single day.