Kyndryl's stock jumps 30% as its AI consulting business and cloud work grow

Investors liked what they heard from Kyndryl. Shares of the former IBM infrastructure unit jumped 30% after it beat expectations for the second quarter of its fiscal 2027, Maria Deutscher reports for SiliconANGLE.

The numbers

Revenue was $3.9 billion for the quarter ending September 30, down 1.9% from a year earlier but about $50 million above estimates. Adjusted net income was $92 million, or 42 cents a share, a penny ahead of forecasts. The company expects full-year revenue to be flat to up 2%, with adjusted pretax income of $600 to $700 million.

The beat came from Kyndryl Consult, launched in 2022 to move beyond managing other companies' infrastructure into higher-margin advisory work. Its revenue rose 4.2% and it brought in $3.6 billion over the past year; signings, which predict future revenue, jumped 19%. Hyperscaler-related revenue passed $500 million, up 27%.

The AI part

Much of Kyndryl Consult's work involves AI: building teams of AI agents, setting up training data pipelines and advising on how to spend AI budgets. Its Bridge platform gives agents access to a company's internal data and monitors them for safety compliance. CEO Martin Schroeter credited demand for its AI-led modernization work.

The other part

The adjusted figures exclude a $38 million workforce reduction charge, part of a cost-cutting program meant to save up to $500 million a year starting in fiscal 2028.

That combination is becoming familiar in IT services: growth from helping clients adopt AI, alongside cuts at home. The consultants selling agents are also, quietly, using them.

Scoreboard update: Draw. Selling AI to clients lifts Kyndryl's stock, while it trims its own workforce.

Stay undead.