IBM stock slipped late Wednesday after the computing giant reported first quarter earnings ahead of expectations, with sales slightly below estimates. The firm also announced a $6.4 billion acquisition of cloud-software company HashiCorp (HCP), a deal that was reported as nearly done a day earlier by the Wall Street Journal.

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IBM (IBM) said that it earned an adjusted $1.68 per share on sales of $14.46 billion for the March-ending quarter. On average, analysts projected the Armonk, N.Y.-based company would post adjusted earnings of $1.60 per share on sales of $14.53 billion, according to FactSet.

For the same period a year earlier, IBM posted adjusted earnings of $1.36 per share on sales of $14.25 billion.

Meanwhile, the tech giant said plans to pay $6.4 billion, or $35 per share, to acquire HashiCorp.  The acquisition will “create a comprehensive end-to-end hybrid cloud platform for the AI era,” according to IBM’s news release.

Further, IBM affirmed its previous full-year guidance for mid-single digit revenue growth for 2024 and $12 billion in free cash flow.

“We continue to capitalize on the excitement and demand for enterprise AI from our clients,” IBM Chief Executive Arvind Krishna said in the news release. “Our book of business for Watsonx and generative AI again showed strong momentum, growing quarter over quarter, and has now eclipsed one billion dollars since we launched watsonx in mid-2023.”

On the stock market today, IBM stock fell more than 6% to 171.51 in after-hours action.

More earnings coverage to come.

IBM Stock: Technical Ratings

Prior to earnings, IBM stock gained 1% in Wednesday trading. Shares have gained 13% this year and 46% in the past 12 months.

Coming into the report, IBM stock had an IBD Composite Rating of 81 out of a possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.

Further, IBM stock’s IBD Relative Strength Rating was 86 out of 99.

Prior to earnings, IBD MarketSurge shows that IBM stock has formed a flat base, with a potential buy point of 199.18.

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