IBM just proved that enterprise AI isn't just hype - it's big business. The tech veteran's stock jumped 8% after revealing its generative AI book of business topped $12.5 billion, alongside fourth-quarter earnings that blew past Wall Street's expectations. With revenue climbing 12% to $19.69 billion and mainframe sales surging 67%, CEO Arvind Krishna's bet on AI-powered infrastructure is paying off in a market that's been skeptical of IBM's comeback story.
IBM just delivered the kind of earnings beat that reminds investors why the 112-year-old company still matters in the AI era. Shares rocketed 8% in after-hours trading Wednesday after the tech giant posted fourth-quarter results that crushed expectations across the board - and revealed a generative AI business that's become a genuine revenue engine.
The headline number tells the story: IBM's generative AI book of business now stands at more than $12.5 billion. That's not projected revenue or pipeline fantasy - it's signed business that validates CEO Arvind Krishna's multi-year push to transform IBM into an AI and hybrid cloud powerhouse. "This capped a strong 2025 for IBM where we exceeded expectations for revenue, profit and free cash flow," Krishna said in a statement that understated what may be the company's strongest quarter in years.
The numbers back up the swagger. IBM posted $19.69 billion in revenue for Q4, sailing past the $19.23 billion analysts polled by LSEG expected. That's 12% growth from the $17.6 billion IBM brought in a year earlier - the kind of acceleration that's been rare for Big Blue in recent years. Adjusted earnings hit $4.52 per share, well above the $4.32 consensus, while net income more than doubled to $5.6 billion from $2.92 billion in the year-ago period.
But it's what's happening under the hood that has Wall Street recalculating IBM's AI credentials. The company's infrastructure business - long seen as a legacy drag - suddenly looks like a strategic advantage. Infrastructure sales surged 21% to $5.1 billion, powered by a jaw-dropping 67% year-over-year jump in IBM Z Systems mainframe revenue. Those aren't the numbers of a dinosaur waiting for extinction. They're the signature of enterprises betting on IBM's hybrid approach to AI infrastructure, where on-premises computing still matters for regulated industries that can't just throw everything into the cloud.
