IBM shares gain after Q1 2026 earnings top estimates, with revenue up 9.5% and software growth accelerating.
IBM reported Q1 2026 non-GAAP EPS of $1.91, beating estimates of $1.81, as revenue rose 9.5% year over year to $15.917 billion. Software revenue climbed 11.3%, led by a 13% increase in Red Hat sales, while mainframe revenue surged 51% in the quarter.
The company has trailed the S&P 500 over the past year, rising just 3% compared to the index’s 21% gain. Analysts now assign a 90% probability of a Q2 earnings beat, citing IBM’s shift toward AI infrastructure and hybrid cloud.
Jim Cramer endorsed IBM as a buy at $292.59, calling the stock inexpensive at a 23 forward P/E and praising CEO Arvind Krishna’s execution. The stock has rebounded from early-year lows but remains below broader market performance.