IBM (IBM) shares ended the last trading session 5% higher at $264.94. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 0.6% loss over the past four weeks.
The uptrend was largely buoyed by IBM’s collaboration with OpenAI for advanced frontier AI capabilities in security operations. Leveraging OpenAI's models, IBM has launched a new application security service that can go beyond traditional code scanning and help organizations identify and validate software vulnerabilities with greater speed and precision
Powered by IBM Consulting Advantage, it connects client application environments to advanced AI in a controlled, secured and governed way to enable large-scale exposure analysis. This enterprise-ready service helps with continuous monitoring to reassess risk over time as code changes and new threats emerge.
This technology and consulting company is expected to post quarterly earnings of $2.95 per share in its upcoming report, which represents a year-over-year change of +5.4%. Revenues are expected to be $17.86 billion, up 5.2% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For IBM, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on IBM going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
IBM is a member of the Zacks Computer - Integrated Systems industry. One other stock in the same industry, Agilysys (AGYS), finished the last trading session 2.3% higher at $86.37. AGYS has returned 5.8% over the past month.
For Agilysys, the consensus EPS estimate for the upcoming report has changed -7.4% over the past month to $0.4. This represents a change of +21.2% from what the company reported a year ago. Agilysys currently has a Zacks Rank of #1 (Strong Buy).
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International Business Machines Corporation (IBM): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).