IBM shares advanced on Thursday, buoyed by a rally in consulting stocks after Accenture delivered quarterly results that exceeded expectations and raised its full-year guidance. The move offered a measure of relief for a sector that has been under pressure over concerns about macroeconomic headwinds and the potential for artificial intelligence to disrupt traditional consulting services.
IBM stock climbed as much as 5% during the session before settling higher by about 2% in later trading. Accenture shares, meanwhile, surged more than 20% after the company reported revenue of $9.28 billion, topping analyst forecasts of $8.86 billion. The strong print and improved outlook suggested that demand for consulting services remains resilient despite a challenging environment. Before Thursday, Accenture shares had fallen nearly 32% this year, making the rebound particularly notable.
The read-through matters for IBM because consulting is its second-largest business segment. While IBM also derives a substantial portion of revenue from higher-margin software and maintains a legacy mainframe business, the health of its consulting arm is closely watched by investors. Rival Cognizant Technology also raised its annual profit forecast in July, pointing to strength in financial services, and its shares traded higher on Thursday as well.
For IBM, the positive sector sentiment arrived after a bruising stretch. The company's shares had dropped 26% year to date through Wednesday's close, following second-quarter results that missed Wall Street expectations and a rare pre-announcement indicating softer customer spending. IBM reported $17.2 billion in second-quarter revenue and cut its full-year guidance, raising questions about its organic growth trajectory.
Performance across IBM's segments was mixed. Software revenue held up, but infrastructure revenue declined 7% and consulting revenue was flat. CEO Arvind Krishna said customers shifted quarterly budgets toward servers, storage and memory products late in June to get ahead of anticipated price increases for supply-constrained infrastructure. He also pointed to execution issues, acknowledging that IBM did not adapt and move quickly enough to prevent several large deals from falling through before the quarter ended.
Accenture's results provided a contrasting signal for the consulting industry, though the two companies have different business mixes. Accenture's stronger numbers and raised outlook suggested that its consulting business is holding up despite broader economic pressures and worries about AI displacing traditional services.
IBM expands AI deployment options
Separately, IBM announced a self-hosted deployment option for IBM Bob, its agentic software development platform, as it seeks to meet enterprise demand for greater control over AI systems. The new option allows organizations to run AI-powered software development in on-premises, private-cloud, sovereign-cloud and air-gapped environments.
IBM said the setup is designed to help enterprises keep sensitive code, data and workflows within environments they control. The offering targets regulated industries that require strict control over data residency, security policies and AI governance. Customers can run supported models on premises, including in air-gapped environments, or connect Bob to external model services through hybrid configurations.
"The future of enterprise AI will depend on security, governance and sovereignty," said Neel Sundaresan, GM of AI and Automation at IBM. "Organizations need AI that operates inside environments they have control over, especially when working with sensitive code and regulated data." He added that Bob's self-hosted deployment allows enterprises to use agentic AI while maintaining security, compliance and operational control.
This article is for informational purposes only and does not constitute financial advice.
