Is IBM Stock a Buy Now?

Shares of IBM (NYSE: IBM) rose 3% during after-hours trading on Wednesday following its third-quarter report. The tech giant's revenue rose 6% year over year (15% in constant currency terms) to $14.1 billion, which beat analysts' estimates by $550 million. Its adjusted earnings dipped 2% to $1.81 per share, but still cleared the consensus forecast by a penny.

Does that earnings beat make IBM a safe stock to buy in this volatile market? Let's review Big Blue's growth over the past year, its progress toward its pre-spinoff promises, and its valuations.

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A return to consistent revenue growth

IBM spun off its sluggish managed infrastructure services unit as Kyndryl Holdings (NYSE: KD) last November. It subsequently restructured its business around three simpler segments: software (40% of its revenue in the first nine months of 2021), consulting (33%), and infrastructure (25%). The remaining 2% came from its financing segment and other businesses.

Before spinning off Kyndryl, IBM told investors it could grow its software revenue at a mid-single-digit rate from 2022 to 2024. It also predicted its consulting revenue would rise by the high single digits, its infrastructure revenue would stay roughly flat, and its total revenue would rise at a mid-single-digit rate. This is what happened over the past four quarters: