What Happened?
Shares of technology and consulting giant IBM (NYSE: IBM) jumped 5.6% in the morning session after the company, in partnership with HSBC, announced the world's first-known successful trial of quantum-enabled algorithmic trading.
This collaboration showed that using IBM's quantum systems improved the prediction of bond trade outcomes by up to 34% compared to traditional computing methods. The trial focused on the European corporate bond market, where the technology helped to better price customer inquiries in a competitive bidding process. This milestone represented a significant development in finding practical uses for quantum computers to solve real-world financial problems. The news positioned IBM at the forefront of applying this advanced technology in the financial services industry. In separate news, IBM Japan also revealed a team-up with Fujitsu to advance innovation in AI and healthcare.
Is now the time to buy IBM? Access our full analysis report here, it’s free.
What Is The Market Telling Us
IBM’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock dropped 7.8% on the news that the company's second-quarter earnings report revealed that revenue from its software division missed analyst expectations, overshadowing an otherwise strong quarter.
The technology giant surpassed Wall Street's forecasts for both overall revenue and profit. However, the underperformance in the crucial software segment raised concerns among investors about the growth trajectory for its key artificial intelligence (AI) and hybrid cloud businesses.
Adding to the negative sentiment, CEO Arvind Krishna offered cautious commentary during the company's earnings call. This combination prompted a sell-off as the specific miss in a high-growth area outweighed the broader earnings beat.
IBM is up 28.6% since the beginning of the year, and at $282.74 per share, it is trading close to its 52-week high of $294.78 from June 2025. Investors who bought $1,000 worth of IBM’s shares 5 years ago would now be looking at an investment worth $2,377.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
