International business machines today
International business machines
- 52-week range
- $ 162.62
▼
$ 265.72
- Dividend yield
- 2.64%
- P/e ratio.
- 39.45
- Value is valuable
- $ 225.53
International business machines NYSE: IBM There was a solid start until 2025. Promotions grew by 15% as of February 6. This was mainly from his recent report on income, which surpassed expectations. IBM, a player with fewer conversations in AI, positions himself as formidable power.
Along with its strong revenue results, the company noted that it sees the development of distilled deepseek models as confirmation of its strategy.
Below I will analyze the income report and provide additional information about the long -term strategy of the company. I will finish, giving a common look at IBM shares.
IBM: Spike Spike after booking AI
After the results of the IBM profit in 4024, 2024, the shares of a technological company jumped by about 13% in one day. In income, the results essentially corresponded to estimates of 17.6 billion dollars. USA, which demonstrates an increase of only 2%. The company’s software segment led to the fact that sales are growing by 11%. His software solutions are largely focused on helping applications that exist in hybrid clouds. With profit per share (EPS), the company reliably surpassed the estimates by almost 4%, since the margin in its software segment increased by 220 basic points.
When it comes to AI, the company saw how its reservation is associated with an increase in technology by $ 2 billion compared to the third quarter of 2024. This is a significant increase of 67% in just a quarter. In Genai, the company’s booking and income receive 80% of its consulting segment and 20% of the software segment.
In consulting, the company works with enterprises to find out how they can significantly implement Genai to increase performance. In general, the consulting business of the company grew by only 1% in the quarter. The company explained this by the fact that customers “reorient their expenses on IT for digital transformation and initiative for artificial art.” Customer expenses are shifted towards AI. This change probably damages the IBM consulting business. These changes in expenses have not yet received a strong increase in the total consulting income.
Friday, February 7, February 7, 2025
IBM: Genai can charge its flywheel effect
In the future, IBM hopes to use the effect of the flywheel. The company reports that 80% of his income comes from customers who buy services in all its segments. This includes software, consulting and infrastructure. This means that if he acquires a client in one of these segments, he often expands the relationship by two others.
The rapid growth in Genai’s booking in Genai creates excitement, thinking about the possible effect of the flywheel from this. For me, consulting on how to use Genai should be a area where enterprises continue to invest in significant funds over time. Understanding what AI can do, especially from the point of view of business, is still developing. IBM notes that 98% of enterprises experimented with AI, but only 26% scaled these experiments before production. Since the revolution of artificial intelligence ripens from the early stages, IBM has a great opportunity to satisfy customer needs.
The company also believes that the appearance of Deepseek confirms its approach to language models. The company considers small distilled deepseek models as a similar strategies that it used to develop its own models. The company creates the models “Built -in for the appointment”. They succeed in specific cases of use instead of striving for general opportunities. He compared the performance of his model of granite seven billion parameters with meta -platform indicators’ NASDAQ: met Llama 3 70 billion parameter models. IBM claims that when setting a specific option for using business, accounting, its model was 6% better, while it cost 75% less. This is convincing. For me, this target strategy can satisfy customer needs at a more competitive price.
The latest thoughts on IBM
At the moment, IBM is traded on the highest forecasts of the price of profit (P/E) for many over the past 20 years almost 24 times. This is slightly lower than the general technological sector, but at present the company is growing only by 2%. The highest price of the company from analysts in Wedbush shows 18% growth in promotions. For me there is a story for IBM in AI. The possible further penetration of the flywheel into space can be exciting. I would like the assessment to decrease, but IBM shares can continue to win even at these levels.
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