IBM software revenue meets expectations, market concerns about its AI business still lingering, stock drops more than 5% in after-hours trading.

In a statement released by IBM on Wednesday, software revenue in the first quarter ending March 31 increased by 11% year-on-year to $7.05 billion; total revenue grew by 9% year-on-year to $15.9 billion, exceeding analysts' average expectation of $15.7 billion. The longstanding tech company has transformed into a high-growth software services provider through acquisitions of companies such as Red Hat, HashiCorp, and Convergent. However, after shifting its focus on business transformation, IBM has become a concern for the market - investors are worried that artificial intelligence tools will replace its existing large amount of software products. In February of this year, AI startup Anthropic released a tool that claims to modernize old programming languages running on IBM mainframes, causing IBM's stock price to experience the largest drop in decades. After the financial report was released, the stock fell by 5% in after-hours trading. The closing price of IBM's stock on that day was $251.86, with a cumulative decline of 15% this year.