By Trefis Team
Publication Date: 2026-10-19 10:45:00
Over the past twelve months, International Business Machines (IBM) stock lost 15.2%, trailing the 16.2% return for the S&P 500. Executives warned on a July 22 earnings call that fiscal Q2 2026 fell short of expectations. During that presentation, however, management expressed complete conviction that one specific unit will achieve double-digit long-term growth. Which part of IBM is that, and is it showing any sign of faster growth yet?
IBM Is Betting On Software Growing At Double Digits
That unit is software. Management noted on the call that it maintains “complete conviction in the double-digit long-term software growth.”
Executives also highlighted annual recurring revenue, or ARR, of $24.6 billion at the end of the second quarter. This marked an 8% increase from a year earlier.
This baseline proved resilient during a weak quarter. Many clients redirected spending toward servers, storage and memory. Still, subscription and consumption-based software…
