International Business Machines Corporation IBM has surged 16% over the past six months compared with the industry’s growth of 1.8%, outperforming peers like Microsoft Corporation MSFT and Amazon.com, Inc. AMZN. Despite the rising adoption of enterprise capabilities of Azure OpenAI and Amazon Web Services, both Microsoft and Amazon are lagging behind IBM in terms of price performance. While Microsoft has gained 5% over the same period, Amazon has declined 8.4%.
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IBM is benefiting from healthy demand trends for hybrid cloud and AI (artificial intelligence) solutions, which drive the Software and Consulting segments. The company’s growth is expected to be aided by analytics, cloud computing and security in the long term. A combination of a better business mix, improving operating leverage through productivity gains, and increased investment in growth opportunities will likely boost profitability.
With a surge in traditional cloud-native workloads and associated applications, along with a rise in generative AI deployment, there is a radical expansion in the number of cloud workloads that enterprises are currently managing. This has resulted in heterogeneous, dynamic and complex infrastructure strategies, which have led firms to undertake a cloud-agnostic and interoperable approach to highly secure multi-cloud management. This, in turn, has translated into a healthy demand for IBM hybrid cloud solutions. In addition, the buyout of HashiCorp has significantly augmented the company’s capabilities to assist enterprises in managing complex cloud environments. HashiCorp’s tool sets complement IBM RedHat’s portfolio, bringing additional functionalities for cloud infrastructure management and bolstering its hybrid multi-cloud approach.
IBM’s watsonx platform has been the core technology platform for its AI capabilities. It delivers the value of foundational models to the enterprise, enabling them to be more productive. This enterprise-ready AI and data platform comprises three products to help organizations accelerate and scale AI: the watsonx.ai studio for new foundation models, generative AI and machine learning, the watsonx.data fit-for-purpose data store built on an open lake house architecture and the watsonx.governance toolkit to help enable AI workflows to be built with responsibility and transparency.
The company recently launched watsonx AI Labs in New York City to accelerate AI adoption by unlocking its global network of engineering labs for AI developers. This collaborative hub of IBM researchers and engineers with startups, scale-ups and some of the world’s largest enterprises will seek to co-create agentic AI solutions for clients and foster the growth of the innovation ecosystem. The watsonx AI Labs will connect IBM’s enterprise resources and expertise with the next generation of AI developers seeking to build breakthrough AI applications for businesses.
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