IBM's Rise in the Artificial Intelligence Sector
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy IBM?
Source: Fool
- AI Revenue Growth: IBM's generative AI offerings have generated $12.5 billion in cumulative revenue to date, primarily from its consulting arm, which boasts a backlog of $32 billion, indicating strong market demand and future growth potential.
- Stable Software Revenue: IBM's recurring software revenue is now annualized at $23.6 billion, reflecting ongoing investments in AI and high customer reliance on its solutions, further solidifying the company's market position.
- Hardware and Services Integration: Unlike Nvidia and Alphabet, IBM provides AI solutions through the sale and servicing of entire mainframe computers, a business model that enhances customer flexibility while ensuring ongoing consulting and software revenue, creating a stable income stream.
- Optimistic Future Outlook: As IBM continues to introduce new technologies like Project Bob, it is expected to drive further high-margin sales growth, attracting more investor attention to its unique razor/razor-blade business model, thereby enhancing stock performance.
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Analyst Views on IBM
Wall Street analysts forecast IBM stock price to rise
16 Analyst Rating
11 Buy
4 Hold
1 Sell
Moderate Buy
Current: 259.520
Low
210.00
Averages
315.80
High
375.00
Current: 259.520
Low
210.00
Averages
315.80
High
375.00
About IBM
International Business Machines Corporation is a provider of global hybrid cloud and artificial intelligence (AI) and consulting expertise. The Company’s segments include Software, Consulting, Infrastructure and Financing. The Software segment includes hybrid cloud and AI platforms, which allow clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment focuses on integrating skills on strategy, experience, technology and operations by domain and industry. The Infrastructure segment is focused on the hybrid cloud infrastructure market, providing on-premises and cloud-based server and storage solutions. In addition, it offers a portfolio of life-cycle services for hybrid cloud infrastructure deployment. The Financing segment provides client and commercial financing, facilitating its clients’ acquisition of hardware, software and services. It helps clients in more than 175 countries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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