IBM IBM-N on Wednesday recorded a slowdown in growth in its key cloud software segment, overshadowing booming AI-driven demand for the company’s new mainframe that pushed third-quarter sales and profit above market estimates.

The company’s shares were down 5 per cent in extended trading.

Slower growth in IBM’s cloud segment, housed within its software unit, raised alarm bells across investors betting heavily on Big Blue’s ability to benefit more from booming demand for cloud services, as artificial intelligence adoption rises.

Sales growth in the hybrid cloud unit - known as Red Hat - decelerated to 14 per cent from 16 per cent growth in the previous quarter, stealing the spotlight from third-quarter revenue of $16.33-billion, which beat analysts’ average estimate of $16.09-billion, a

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