TLDR
- IBM stock rose 2.6% Thursday, its biggest one-day jump since September.
- The move was driven by Accenture’s earnings, not any IBM-specific news.
- Accenture posted consulting revenue of $9.28 billion, beating estimates of $8.86 billion, and shares jumped 16%.
- IBM is still down 26% year to date following a rough July earnings pre-announcement.
- IBM reports third-quarter earnings later this month, a key test for its AI and consulting momentum.
IBM stock climbed 2.6% on Thursday. It was the stock’s best single day since September.
International Business Machines Corporation, IBM
The jump didn’t come from IBM itself. It came from a competitor’s earnings report.
Accenture posted consulting revenue of $9.28 billion for the quarter. That beat analyst expectations of $8.86 billion.
Accenture shares surged 16% on the news. The company also raised its full-year forecast.
That matters for IBM because consulting is its second-largest business unit. Software still brings in the most revenue, but consulting is a major piece of the puzzle.
Investors took Accenture’s strength as a sign that consulting demand is holding up. There had been worries that AI might cut into traditional consulting work.
A Rough Few Months for IBM
IBM shares are still down 26% this year. The decline traces back to a rare earnings pre-announcement in July.
At the time, CEO Arvind Krishna said customers shifted their budgets toward servers, storage, and memory at the end of June. They wanted to beat expected price hikes on supply-constrained infrastructure.
That shift hurt IBM’s numbers. The company posted $17.2 billion in second-quarter revenue, below Wall Street’s forecast, and cut its full-year guidance.
Infrastructure revenue dropped 7% that quarter. Consulting sales came in flat.
Krishna put some of the blame on execution. He said IBM didn’t move fast enough to close a number of large deals before quarter-end.
Rival Cognizant Technology offered its own good news in July too. The company raised its annual profit forecast, citing strength in financial services. Cognizant stock rose 6% on Thursday alongside the broader sector rally.
What’s Next for IBM
IBM also rolled out a self-hosted version of its Bob software-development platform this week. It’s built for on-premises, private-cloud, and air-gapped environments.
The move targets regulated customers with strict data and security needs. It’s part of IBM’s broader push into hybrid-cloud and enterprise AI.
Wall Street still leans positive on the stock overall. Analysts carry a “Moderate Buy” consensus rating with an average price target of $253.52.
Not everyone’s on board though. Some investors like IBM for its valuation, pointing to its earnings multiple and roughly 3% dividend yield, even as growth questions linger.
IBM also faces a securities-law investigation tied to its July disclosure. Law firm Hagens Berman announced it’s looking into the matter, which followed a one-day market-cap loss of more than $68 billion.
That’s an allegation, not a finding of wrongdoing, but it adds another layer of uncertainty.
IBM is scheduled to report third-quarter earnings later this month. Analysts reportedly expect high-single-digit earnings growth for the period.
That report will show whether Thursday’s borrowed optimism from Accenture turns into something IBM can claim for itself.
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