New York, April 22, 2026, 13:13 EDT
International Business Machines Corp. is set to report first-quarter results on Wednesday. This time, the Street isn’t so focused on revenue growth itself—attention is shifting to software performance and whether the early completion of its $11 billion Confluent acquisition will be enough to lift guidance for 2026.
IBM plans to hold its results call at 5 p.m. ET, after markets shut, according to the company. Management is set to address Red Hat, AI, and consulting demand on the call—comments that will reach investors ahead of Thursday’s session.
IBM’s latest report lands as the company pushes to highlight its shift toward software, with investors still wondering just how much artificial intelligence—AI—might shake up its legacy software and tech services. Some AI products now automate coding and support, sparking fresh concerns about IBM’s consulting arm and mainframe business.
According to Barron’s, analysts are looking for adjusted earnings to come in at $1.81 per share, with revenue projected around $15.6 billion—both higher than last year’s $1.60 per share on $14.5 billion. Software is likely to do the heavy lifting again, with that segment’s revenue seen climbing 10% to $6.98 billion.
It’s not just about beating the Street’s quarterly consensus. According to TipRanks, investors want to see if IBM’s software division—the company’s biggest—can sustain growth, especially as consulting lags. RBC Capital Markets analyst Matthew Swanson pointed to software and infrastructure as the likely bright spots, citing automation and transaction processing, TipRanks reported.
Red Hat poses the tougher challenge. The division deals in hybrid-cloud software—tools that let businesses operate applications both in-house and on public clouds. Its growth rate has emerged as a bellwether for IBM’s ability to keep snagging big enterprise tech contracts.
IBM said it wrapped up the Confluent buyout on March 17, bringing in a data-streaming platform tapped by more than 6,500 businesses — among them, 40% of the Fortune 500. The move aims to furnish AI models and automated workflows with live data feeds throughout on-premises and hybrid-cloud setups.
That’s what’s putting guidance in the spotlight, not just the profit figure itself. Constant-currency revenue, which removes exchange-rate effects, remains a key number. Analysts want to see if IBM will boost its 2026 growth outlook past the old “more than 5%” mark. According to Investing.com, the quicker-than-expected Confluent deal has stoked hopes for stronger guidance. Investing.com
Analyst moves ahead of the report came in mixed: Jefferies dropped its price target to $320 from $370 but stuck with a Buy. RBC went to $330 from $361, still calling the stock Outperform. Oppenheimer trimmed its target down to $320 from $380, describing the shares as “highly undervalued,” per TipRanks/The Fly. TipRanks
Even with a stronger quarter, doubts linger. Morgan Stanley’s Erik Woodring held his Equal Weight stance, arguing that a 4% uptick in Q1 earnings forecasts likely “would not be enough to reignite the IBM bull case.” Over at Citi, analysts continued to label IBM as “defensive” given what they described as an “increasingly hostile” environment for enterprise software. TipRanks
Consulting remains a soft patch. Since the unit relies on clients’ willingness to spend, stalled or postponed transformation deals could undermine the software narrative. That dynamic leaves IBM looking more like services players—think Accenture—while Microsoft and Oracle still serve as benchmarks for how much enthusiasm investors have for AI and cloud in the enterprise space.
IBM’s most recent quarter buys the company a bit of breathing room. Back in January, Reuters said IBM topped fourth-quarter revenue and profit forecasts, driven by stronger software sales tied to AI demand. The company also flagged roughly $600 million in anticipated 2026 dilution from the Confluent purchase—primarily linked to stock-based pay and interest expenses.
IBM shares slipped roughly 1.6% to $251.69 in Wednesday afternoon action, pulling the company’s market cap to about $239 billion ahead of its earnings release.
