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Yahoo
15-07-2025
- Business
- Yahoo
IBM vs. Amazon: Which Cloud Infrastructure Stock Offers More Upside?
International Business Machines Corporation IBM and Inc. AMZN are leading players in the global cloud computing industry. IBM offers cloud and data solutions that aid enterprises in digital transformation. In addition to hybrid cloud services, the company provides advanced information technology solutions, computer systems, quantum computing and supercomputing solutions, enterprise software, storage systems and the other hand, Amazon Web Services ('AWS') is the world's most comprehensive and widely adopted on-demand cloud computing platform, offering more than 200 fully featured services from data centers globally. Millions of customers, including the fastest-growing startups, largest enterprises and leading government agencies, are using AWS to lower costs, become more agile and innovate faster. It reportedly offers the widest variety of databases that are purpose-built for different types of applications to enable subscribers to choose the right tool for the a focus on hybrid cloud and AI (artificial intelligence), both IBM and Amazon are strategically positioned in the cloud infrastructure market and have the wherewithal to cater to the evolving demands of business enterprises. Let us delve a little deeper into the companies' competitive dynamics to understand which of the two is relatively better placed in the industry. IBM is poised to benefit from healthy demand trends for hybrid cloud and AI, 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. IBM has extended its collaboration with NVIDIA Corporation NVDA to scale AI workloads and agentic AI applications. Per the latest agreement, IBM aims to launch a content-aware storage (CAS) capability for its hybrid cloud infrastructure offering (dubbed IBM Fusion) and expand its watsonx integrations with NVIDIA while introducing new IBM Consulting capabilities. The CAS capability will enable firms to extract the hidden meaning of unstructured data for inferencing to scale and enhance AI applications without compromising security. The integration of watsonx with NVIDIA Inference Microservices will offer firms greater accessibility to leading AI models across multiple cloud environments. IBM's watsonx platform is likely to be the core technology platform for its AI capabilities. This enterprise-ready AI and data platform delivers the value of foundational models to the enterprise, enabling them to be more solid hybrid cloud and AI traction, IBM is facing stiff competition from AWS and Microsoft Corporation's MSFT Azure. Increasing pricing pressure is eroding margins, and profitability has trended down over the years, barring occasional spikes. The company's ongoing, heavily time-consuming business model transition to the cloud is a challenging task. Weakness in its traditional business and foreign exchange volatility remain significant concerns. Amazon is the leading provider of cloud infrastructure as a service to enterprise customers. The expanding customer base of AWS, driven by its strengthening cloud offerings, will continue to aid Amazon's dominance in the global cloud space. Amazon's strategic expansion of its Bedrock platform has positioned it as a frontrunner in the enterprise AI race. Amazon Bedrock has emerged as a game-changing, fully managed service that offers enterprises seamless access to high-performing foundation models from leading AI companies. The platform's recent developments, including automated reasoning checks and multi-agent collaboration capabilities, address critical challenges in AI adoption while opening new revenue streams for Amazon's cloud company is investing heavily in AI infrastructure, including the development of custom AI silicon like Trainium 2, which offers 30-40% better price performance than competing GPU-powered instances. Amazon aims to extend AWS' AI and machine learning (ML) capabilities to facilitate improved decision-making. It intends to expand its global infrastructure for faster and more reliable service with low latency and maximum availability. From cloud-native applications and AI-driven solutions to edge computing and sustainability initiatives, AWS is likely to push the limits in the realm of cloud computing the substantial capital expenditure required for AI infrastructure expansion may weigh on margins in the coming quarters. In addition, while AWS' growth remains impressive, the company faces capacity constraints in AI services that could limit near-term growth potential. Moreover, AWS has historically been less open to hybrid cloud than rivals like Microsoft Azure, which integrates well with on-premise environments via tools like Azure Arc. Data localization laws and stricter regulatory requirements create friction for AWS' global expansion, while stringent government scrutiny in regions like the EU and China adds compliance complexity. The Zacks Consensus Estimate for IBM's 2025 sales and EPS implies year-over-year growth of 5.5% and 6%, respectively. The EPS estimates, however, have remained static over the past 60 days. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Amazon's 2025 sales and EPS implies year-over-year growth of 8.9% and 12.7%, respectively. The EPS estimates have been trending northward over the past 60 days. Image Source: Zacks Investment Research Over the past year, IBM has gained 52.6% compared with the industry's growth of 7.2%. Amazon rose 16.9% over the same period. Image Source: Zacks Investment Research IBM looks more attractive than Amazon from a valuation standpoint. Going by the price/earnings ratio, IBM's shares currently trade at 25.05 forward earnings, significantly lower than Amazon's 33.38. Image Source: Zacks Investment Research IBM carries a Zacks Rank #3 (Hold), while Amazon carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks companies expect their sales and profits to improve in 2025. Long-term earnings growth expectations for IBM and AMZN are 4.3% and 21.4%, respectively. IBM has a better price performance and attractive valuation metric compared with Amazon. However, Amazon has shown steady revenue and EPS growth for years, while IBM has been facing a bumpy road. With a VGM Score of A and a superior Zacks Rank, Amazon seems to be a better investment option at the moment. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report International Business Machines Corporation (IBM) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
09-07-2025
- Business
- Yahoo
Can IBM Power11 Server Redefine Business Application Processes?
International Business Machines Corporation IBM has launched IBM Power11, the next-generation IBM Power server, which offers up to 55% better core performance and up to 45% more capacity compared to its predecessors. The offering facilitates business enterprises to achieve higher resiliency, performance and scalability for seamless hybrid deployment on-premises or in the IBM Cloud. This, in turn, enables firms to reduce complexity, improve workload efficiency and gain hybrid cloud flexibility to maintain competitiveness in the AI advanced technologies like autonomous patching and automated workload movement using generative AI, IBM Power enables planned system maintenance to avoid costly planned downtime and help reduce operational risk. It interoperates with IBM Concert using generative AI to provide actionable insights and automate remediation. This reduces operational costs for patching vulnerabilities through fast response times and higher efficiency for securing all systems, freeing up IT resources and manpower, which then can be used for other productive purposes. In addition, the IBM Power Cyber Vault solution enables guaranteed ransomware threat detection in less than a minute with proactive immutable snapshots that are automatically captured, stored and tested on a custom-defined schedule. Boasting AI-ready infrastructure with built-in, on-chip acceleration, IBM Power also helps scale operations to support mission-critical AI workloads with twice the performance per watt versus comparable x86 servers. Inc.'s AMZN strategic expansion of its Bedrock platform has positioned it as a frontrunner in the enterprise AI race. Amazon Bedrock has emerged as a game-changing, fully managed service that offers enterprises seamless access to high-performing foundation models from leading AI companies. The platform's recent developments, including automated reasoning checks and multi-agent collaboration capabilities, address critical challenges in AI adoption while opening new revenue streams for Amazon's cloud Corporation MSFT is striving to maintain its competitive edge in AI with the introduction of the Agent Store, which creates a new marketplace for AI-powered workplace assistants. The platform already features more than 70 agents and provides developers with monetization opportunities through Microsoft 365 Copilot integration. The Azure AI Foundry application and agent development hub has now been adopted by developers at more than 70,000 enterprises and digital-native companies. Microsoft's Azure AI Agent Service has been utilized by more than 10,000 organizations to build, deploy and scale agents. IBM has surged 63.3% over the past year compared with 4.3% growth for the industry. Image Source: Zacks Investment Research From a valuation standpoint, IBM trades at a forward price-to-sales ratio of 3.98, slightly above the industry. Image Source: Zacks Investment Research The Zacks Consensus Estimate for IBM's earnings for 2025 has remained static over the past 60 days. Image Source: Zacks Investment Research IBM currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report International Business Machines Corporation (IBM) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
04-07-2025
- Business
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IBM Concert Gains Traction: Can This AI-Driven Solution Aid the Stock?
International Business Machines Corporation IBM recently announced that Deutsche Telekom AG DTEGY will deploy the IBM Concert solution to improve overall efficiency. This AI-powered automation solution will provide Deutsche Telekom with intelligent resilience for complex IT operations such as patch management and the orchestration of security-related activities. This, in turn, will help Deutsche Telekom to better address the complexity of critical vulnerabilities across its hybrid cloud platform and respond faster to potential Concert brings together all relevant data and specializations for AI-driven recommendations and workflows. It helps reduce operational costs for patching vulnerabilities through fast response times and higher efficiency for securing all systems, freeing up IT resources and manpower, which then can be used for other productive purposes. Using the IBM Watsonx platform, the fully automated patching process for operating systems has been designed to reduce patching time from 90 minutes to a maximum of 20 minutes. Leveraging Generative AI, IBM Concert develops an optimized and prioritized patching plan by creating contextual information about system topology and business requirements that enables end-to-end AI-powered automation. IBM's Watsonx platform is likely to be the core technology platform for IBM's AI capabilities. Watsonx 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 studio for new foundation models, generative AI and machine learning, the fit-for-purpose data store built on an open lake house architecture and the toolkit to help enable AI workflows to be built with responsibility and transparency. 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, in turn, have led firms to undertake a cloud-agnostic and interoperable approach to highly secure multi-cloud management. IBM is poised to benefit from healthy demand trends for hybrid cloud and AI, 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. Buoyed by strong demand for hybrid cloud and AI, IBM has surged 63.7% over the past year compared with the industry's growth of 9.4%, outperforming peers like Microsoft Corporation MSFT and Inc. AMZN. While Microsoft has gained 6.6%, Amazon jumped 11.3% over this period. One-Year IBM Stock Price Performance Image Source: Zacks Investment Research IBM is currently witnessing an uptrend in estimate revisions. Earnings estimates for 2025 have moved up 4.6% to $10.95 over the past year, while the same for 2026 has increased 4.5% to $11.66. The positive estimate revision portrays bullish sentiments about the stock's growth potential. Image Source: Zacks Investment Research Despite solid hybrid cloud and AI traction, IBM is facing stiff competition from Amazon Web Services and Microsoft Azure. Increasing pricing pressure is eroding margins, and profitability has trended down over the years, barring occasional spikes. The company's ongoing, heavily time-consuming business model transition to the cloud is challenging. Weakness in its traditional business and foreign exchange volatility remain significant concerns. From a valuation standpoint, IBM appears to be trading at a premium relative to the industry and is trading well above its mean. Going by the price/book ratio, the company shares currently trade at 9.92, higher than 3.95 for the industry and the stock's mean of 6.01. Image Source: Zacks Investment Research IBM hybrid cloud blends public cloud, private cloud and on-premises infrastructure to develop a single, flexible, cost-optimal IT infrastructure. With the buyout of HashiCorp, the company has created a comprehensive end-to-end hybrid cloud platform built for AI-driven complexity, delivering clients extensive application, infrastructure and security lifecycle management capabilities. The IBM Concert solution is increasingly gaining wider adoption by incorporating modern AI and automation technologies for a future-proof, scalable and highly secure IT operating with a Zacks Rank #3 (Hold), IBM appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. It is also trading at premium valuation metrics and investors could wait for a better entry point to cash in on its long-term fundamentals. Consequently, it might not be prudent to bet on the stock at the moment. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report International Business Machines Corporation (IBM) : Free Stock Analysis Report Deutsche Telekom AG (DTEGY) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
23-06-2025
- Business
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Will IBM's Growing AI Prowess Deliver Sustainable Growth?
International Business Machines Corporation IBM has positioned itself as a major player in the expanding AI landscape worldwide. Its breakthrough innovations, hybrid cloud and AI are utilized by clients across 175 countries to streamline business processes, optimize cost and gain a competitive edge. The company boasts a vast client base across multiple industries, including financial services, telecommunications, healthcare, retail and recently introduced the industry's first integrated software that combines its industry-leading AI security and AI governance. IBM is a well-known tool that directs, manages and monitors an organization's AI to support responsible, transparent AI use cases. IBM Guardium-AI security secures AI agents and AI models, facilitating trustworthy AI deployments. Comprehensive AI governance is not automatically equal to security. Hence, IBM has integrated these two traits into a cutting-edge software tool to augment the security posture of enterprises' generative-AI systems. The company also enhanced the capabilities of the Guardium AI security tool. The new feature, developed in collaboration with detects new AI use cases in cloud environments, code repositories and embedded systems. This ensures greater visibility and protection of an increasingly decentralized AI is also collaborating with SAP to tap generative-AI technology within the retail industry. In collaboration with The All England Lawn Tennis Club, IBM is developing a new fan feature to drive fan engagement during the Wimbledon championships. Per an IDC report, the global AI market, which was $235 billion in 2024, is expected to reach $631 billion by 2028 with a compound annual growth rate of 27%. With a strong focus on innovation combined with strategic collaborations with key industry leaders in specific sectors, IBM is poised to gain from this emerging market trend. IBM faces stiff competition in most of its markets. Microsoft Corporation MSFT is accelerating generative-AI development with its extended partnership with OpenAI. With Azure AI, Microsoft is building out the app server for the AI wave, providing access to the most diverse selection of models to meet customers' unique cost, latency and design considerations. The company has more than 60,000 Azure AI customers. Microsoft copilot is also gaining solid market traction as companies are rushing to boost the productivity of internal processes, leveraging AMZN has developed its own generative-AI platform called Amazon Bedrock. The platform offers a streamlined way to build and scale generative-AI applications with foundational models from AI21 Labs, Anthropic, Cohere, DeepSeek, Luma, Meta, Mistral AI and others. Amazon Bedrock offers comprehensive data protection and privacy. Moreover, the Amazon Bedrock Guardrails offer configurable safeguards that ensure responsible and trustworthy AI deployments. Its cutting-edge capabilities with flexibility and scale can challenge IBM in the AI domain. IBM has surged 60.6% over the past year compared with the industry's growth of 5.8%. Image Source: Zacks Investment Research Going by the price/earnings ratio, IBM's shares currently trade at 24.9 forward earnings, above the industry's value 21.74. Image Source: Zacks Investment Research The Zacks Consensus Estimate for IBM's earnings for 2025 has risen over the past 60 days. Image Source: Zacks Investment Research IBM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report International Business Machines Corporation (IBM) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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25-04-2025
- Business
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IBM Q1 Earnings & Revenues Beat Estimates on Solid Demand Trend
International Business Machines Corporation IBM reported strong first-quarter 2025 results, with adjusted earnings and revenues beating the respective Zacks Consensus Estimate. The company reported a revenue improvement year over year, driven by strong demand in the Software segment. Healthy demand for hybrid cloud and AI (Artificial Intelligence) solutions with a client-focused portfolio boosted the gross margin. Solid free cash flow is a tailwind. On a GAAP basis, net income from continuing operations was $1.05 billion or $1.12 per share compared with $1.57 billion or $1.69 per share in the year-ago quarter. The significant decline in GAAP earnings was due to high operating expenses and income tax benefit in the year-earlier quarter. Excluding non-recurring items, non-GAAP net income from continuing operations was $1.60 per share compared with $1.68 in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 18 cents. (See the Zacks Earnings Calendar to stay ahead of market-making news.) International Business Machines Corporation price-consensus-eps-surprise-chart | International Business Machines Corporation Quote Quarterly total revenues increased to $14.54 billion from $14.46 billion. This uptick was driven by strong demand for hybrid cloud and AI, which aided growth in the Software segment. On a constant currency basis, revenues were up 2% year over year. The top line beat the consensus estimate by $95 profit improved to $8.03 billion from $7.74 billion in the prior-year quarter, resulting in respective gross margins of 55.2% and 53.5% owing to a strong portfolio mix. Total expenses increased to $6.87 billion from $6.67 billion, driven by higher interest expense and R&D costs. Software: Revenues improved to $6.34 billion from $5.9 billion, driven by growth in Hybrid Platform & Solutions, Red Hat, Automation, Data & AI and Transaction Processing with a strong focus on product innovation. This performance reflects increasing demand for a focused portfolio that provides end-to-end hybrid cloud and AI capabilities. The reported segment revenues surpassed our estimate of $5.97 billion. Segment pre-tax income from continuing operations was $1.85 billion compared with $1.5 billion in the year-ago quarter for margins of 29.1% and 25.4%, respectively. Consulting: Revenues were $5.07 billion compared with $5.19 billion a year ago, owing to soft demand in some end markets and macroeconomic headwinds. The segment's revenues missed our estimate of $5.17 billion. Segment pre-tax income was $558 million compared with $424 million in the year-ago quarter for margins of 11% and 8.2%. Infrastructure: Revenues were $2.89 billion compared with $3.08 billion, due to lower demand in multiple markets. Segment pre-tax income was $248 million compared with $311 million in the year-ago quarter for respective margins of 8.6% and 10.1%.Financing: Revenues remained almost flat at $191 million. Segment pre-tax income was $69 million compared with $92 million in the year-ago quarter for respective margins of 35.8% and 47.7%. During the first quarter, IBM generated $4.37 billion in cash from operations compared with $4.17 billion in the year-ago quarter. Free cash flow was $1.96 billion in the quarter, up from $1.91 billion in the prior-year period, driven by the combination of high revenue scale and productivity. As of March 31, 2025, the company had $11.04 billion in cash and cash equivalents and $56.37 billion of long-term debt. For full-year 2025, the company expects free cash flow of $13.5 billion, driven primarily by growth in adjusted EBITDA. Revenues for 2025 are likely to grow in the vicinity of 5% at constant currency. For the second quarter of 2025, management expects revenues to be in the range of $16.40 billion to $16.75 billion. IBM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Qorvo, Inc. QRVO is scheduled to release fiscal fourth-quarter 2025 earnings on April 29. The Zacks Consensus Estimate for earnings is pegged at 5 cents per share, indicating a decline of 27.34% from the year-ago figure. Pinterest, Inc. PINS is scheduled to release first-quarter 2025 earnings on May 8. The Zacks Consensus Estimate for earnings is pegged at 25 cents per share, indicating an improvement of 25% from the year-ago figure. Bandwidth Inc. BAND is scheduled to release first-quarter 2025 earnings on May 7. The Zacks Consensus Estimate for earnings is pegged at 29 cents per share, indicating an improvement of 7.41% from the year-ago figure. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report International Business Machines Corporation (IBM) : Free Stock Analysis Report Qorvo, Inc. (QRVO) : Free Stock Analysis Report Bandwidth Inc. (BAND) : Free Stock Analysis Report Pinterest, Inc. (PINS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
