US Stock Market Move | Q1 performance exceeds expectations but fails to alleviate concerns about AI impact, IBM's (IBM.US) initial trading falls over 8%

On Thursday, IBM (IBM.US) fell more than 8% in pre-market trading, accumulating a total drop of 22% so far this year, now trading at $230.59 per share. On the news front, despite the company's announcement of first-quarter earnings beating Wall Street expectations, it failed to alleviate investors' concerns about the potential impact of artificial intelligence on its business. In a statement on Wednesday, the company reported that software revenue grew by 11% to $7.05 billion in the quarter ending March 31, slightly above the expected $7.02 billion. Total revenue increased by 9% to $15.9 billion, higher than the analyst average expectation of $15.7 billion. Adjusted earnings per share were $1.91, also higher than expected. With the introduction of tools that automate daily business functions, people are becoming increasingly concerned about artificial intelligence eroding the software industry. IBM's first-quarter revenue growth rate was lower than the 12.2% increase in the previous quarter. The company's software division, with high-profit margins from the Hybrid Cloud division Red Hat and AI toolkits under the Watson brand, also saw slower revenue growth compared to the previous quarter. Jefferies Financial Group Inc. analyst Brent Thill said in an interview that investors are hoping for better performance from IBM's software division. He also added that Wall Street may be paying attention to whether customers are delaying purchases from IBM due to trying out tools from AI companies.