Buoyed by strong demand for hybrid cloud and AI (artificial intelligence), International Business Machines Corporation IBM has surged 39% year to date compared with the industry's growth of 13.1%, outperforming peers like Microsoft Corporation MSFT and Amazon.com, Inc. AMZN.
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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 haul. A combination of a better business mix, improving operating leverage through productivity gains and increased investment in growth opportunities will likely boost profitability.
Its Apptio portfolio of enterprise agile planning (EAP), IT financial management and cloud FinOps solutions was recently made available on Microsoft Azure - the cloud computing platform of Microsoft. IBM also expanded the global availability of its software portfolio to 14 additional countries on the Azure Marketplace to better serve customers on their digital transformation journeys.
IBM's EAP software eases the operation silos by helping portfolio managers and finance teams plan, manage budgets and align workforces across various technology priorities. The software integrates seamlessly with Azure DevOps to provide simplified management, increased efficiencies and potential cost savings by allowing clients to use Microsoft Azure Consumption Commitments.
IBM's Watsonx platform is likely to be the core technology platform for its 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 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.
IBM is currently witnessing an uptrend in estimate revisions. Earnings estimates for 2024 have jumped 3.6% to $10.12 over the past year, while the same for 2025 has increased 1.4% to $10.58. The positive estimate revision portrays bullish sentiments about the stock's growth potential.