Strength in Accenture's Consulting Business Gives IBM Stock a Much-Needed Boost -- Barrons.com

By Mackenzie Tatananni

Shares of International Business Machines were on track to snap a five-day losing streak on Thursday. It wasn't due to progress in quantum computing or any company-specific announcement, but rather on the back of Accenture's strong earnings.

IBM stock jumped 5% on Thursday, pacing toward its largest single-day percentage increase since early June. Accenture, meanwhile, surged 23% toward its best session on record.

While IBM's name is frequently associated with it legacy mainframe business, the company is far more than a hardware play. High-margin software drove the bulk of its revenue last year, while its consulting division stands as its second-largest business unit.

That consulting division explains why IBM shares got a boost on Thursday. Accenture signaled momentum in its core consulting business, posting revenue of $9.28 billion that easily beat analysts' expectations of $8.86 billion.

Earnings arrived alongside a stronger-than-anticipated full-year forecast, suggesting that Accenture's consulting business is holding up against macroeconomic pressures and fears of artificial-intelligence disruption.

The quarter provides much-needed relief for Accenture, whose shares were down nearly 32% heading into Thursday's session, severely lagging the broader market. It also offers the latest sign of resilience in the sector: In July, rival Cognizant Technology raised its annual profit forecast, citing strong growth in its financial services division. Cognizant stock was up more than 11% on Thursday.

For IBM shareholders, Accenture's strong numbers provide welcome relief following Big Blue's dismal earnings report in July. IBM shares plunged following a rare pre-announcement, where management signaled a pullback in customer spending. The drop has contributed to a 26% year-to-date decline through Wednesday's close.

AI played a central role. CEO Arvind Krishna noted that customers abruptly shifted their quarterly budgets toward servers, storage, and memory products at the end of June to beat projected price increases for "supply-constrained infrastructure."

IBM ultimately posted $17.2 billion in revenue for the second quarter, below Wall Street estimates, and trimmed its full-year guidance. Quarterly performance was mixed across business lines: while software revenue proved resilient, infrastructure dropped 7% and consulting sales were flat.

CEO Krishna attributed the results to poor execution, saying IBM didn't "adapt and move quickly enough" to prevent a number of large deals from falling through before the end of the quarter.

While many on Wall Street concluded that the issue stemmed from operations missteps, the discussion reignited concerns over slow organic growth. In a market where narrative frequently dictates near-term stock performance, Accenture's latest earnings should help drum up some much-needed enthusiasm around IBM shares.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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October 01, 2026 10:11 ET (14:11 GMT)