IBM earnings shock: revenue growth jumps to 4.7%!

Bigger than last year, flat against last quarter

IBM sold $17.1bn worth of goods and services in the third quarter of 2026. That is 4.7% more than the same quarter a year earlier. The quarter before, the same comparison came to 1.1%, so the yearly pace picked up. Against the previous quarter, revenue slipped 0.3%, so the business did not really grow in three months. Stretch the view out and revenue has compounded at 5.1% a year over three years. That is the bit a headline misses: a bigger number than last year, and a flat one against last quarter.

Where does the money go? Spending on buildings and equipment took 1.9% of revenue in the quarter. Depreciation, the slow write-off of kit bought in earlier years, took 3.2%. So IBM is still writing off more than it is buying. These figures run through 2026Q3, the last quarter in the data.

The shares had already moved before the news landed

In the week before the release IBM's shares ran 7.3% ahead of a basket of peers. The basket holds 5 companies: Accenture, Microsoft, Salesforce, Oracle and Palantir. On the day of the release that gap was -0.4%, and counting from that day it adds to 0.7%. Only 2 trading days of price data exist after the release. That is fewer days than this kind of comparison normally covers, so the after-the-news figure rests on the days available. Read all of it as movement in the same window as the news, not as the news moving the price.

Priced a touch below the typical peer after a poor year

IBM's P/E is 21.3x against its profit of the past year. The peer median sits at 22.6x. So IBM is priced 5.8% below the peer median on this measure. Cheaper is not the same as better; a low P/E often goes with slow growth.

The year itself was not kind. Over the twelve months to 2026-10-23 the stock's total return was -8.7%. The same money tracking the market index returned 14.4%. One decent quarter does not undo a year of that gap.