International Business Machines (NYSE:IBM) stock price surged over 14% to reach an all-time high of £209 ($261) on 30th January as investors welcomed the impressive growth numbers in its Q4 results, especially from its AI segment. The IBM stock price jump is also the biggest one-day percentage gain ever recorded in the company's history.
In Q4 2024, the company's GenAI book of business jumped almost £1.6 billion quarter-over-quarter to surpass £4.01 billion since the segment's inception. The company's Q4 2024 revenue of £14.13 billion, boosted by a 10% growth in the software segment, buoyed full-year revenue by 1% year-over-year to £50.44 billion.
"Three years ago, we laid out a vision for a faster-growing, more-profitable IBM. I'm proud of the work the IBM team has done to meet or exceed our commitments," said IBM CEO and Chairman Arvind Krishna.
He forecast revenue growth of at least 5% and free cash flow of £10.84 billion in 2025, attributing it to the company's "focused strategy, enhanced portfolio, and culture of innovation."
New Quantum Deal With Spanish Telecom Complements IBM Stock Price
Today, IBM announced a partnership with Spanish company Telefónica Tech to combine IBM's quantum-safe technology with Telefónica's expertise in managed and professional cybersecurity services to develop security solutions designed to address the new and future data risks in a post-quantum world.
The solutions will implement quantum-safe cryptography standards defined by the US National Institute of Standards and Technology to protect organisations' data from the risk of being decrypted by quantum computers.
IBM has also innovated quantum safe-focused enterprise software as a comprehensive solution to anticipated quantum risks. For instance, the IBM Guardium Quantum Safe helps companies with enhanced visibility and manage cryptography to address vulnerabilities, guide remediation, and improve security posture.
IBM Enables DeepSeek R1 On Its AI Watson Computer
Earlier this week, IBM said that it enabled a distilled version of the DeepSeek R1 AI Model on its watsonx.ai computer to accelerate the development of AI applications and foster a knowledge-sharing culture.
AI-powered IBM watsonx.ai is an enterprise-grade studio that allows developers to build, train and deploy GenAI foundation models within business applications. The company aims to offer users open, trusted, and high-performance AI models to power their custom applications. Companies in diverse industries use IBM watsonx.ai to enhance productivity, improve customer service, and extract actionable insights using its impressive inference capabilities.
"The release of DeepSeek-R1, an open-sourced reasoning model on par with OpenAI's o1 series of models, is a significant step in this direction. We hope that it will inspire other model providers to follow suit and contribute to the growth of the open-source AI ecosystem," the company stated.
IBM also detailed a step-by-step approach for developers to upload and deploy foundation models.
BMO Capital increased IBM's stock price target to £224 ($280) from £208 ($260) and retained a "Market Perform" rating. The brokerage said IBM exceeded its free cash flow guide for FY25, which is being driven by robust profits.
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