KEY TAKEAWAYS

IBM ( IBM ) shares jumped 13% to lead S&P 500 gainers Thursday, a day after the company posted fourth-quarter results that topped analysts' estimates as its artificial intelligence (AI) -enabled business surged.

IBM reported adjusted earnings per share (EPS) of $3.92, above the consensus estimate of $3.79 of analysts polled by Visible Alpha. Revenue of $17.55 billion was a tick higher than expectation.

Generative AI Business Soared By Almost $2B From Q3

"Our generative AI book of business now stands at more than $5 billion inception-to-date, up nearly $2 billion quarter over quarter," IBM CEO Arvind Krishna said.

According to a transcript of the earnings call provided by AlphaSense, Krishna added that IBM's AI products "provide clients with a consistent and scalable AI foundation built on open source technology."

Earlier this week, Chinese startup DeepSeek shook markets with its release of an AI model at a fraction of the cost of rivals like OpenAI that is open source —which means it is readily accessible and can be modified or enhanced by anyone.

IBM shares are up almost 40% in the past year.

UPDATE—Jan. 30, 2025: This article has been updated to include fresh share prices.

Read the original article on Investopedia