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https://killexams.com/exam_list/IBMKillexams : IBM Research Secures Future Safe From Quantum Attacks
Quantum computing will bring unimagined innovations to the world when it finally arrives in full glory. Still, quantum remains in the research labs at companies like IBM, Google, and Microsoft. While companies and research institutions are investing billions of dollars to increase the capacity of quantum systems, a time will come in the following years, or decades, when researchers will reach "quantum supremacy." But these large quantum marvels could also jeopardize the security of critical information systems. Researchers, including IBM are working to develop new security algorithms that will be resilient to these attacks.
The Quantum Threat to Security
While quantum can solve computing challenges far beyond what is possible today, its ability to find the factors of large prime numbers makes it the ideal cybersecurity safe cracker once quantum computing systems mature in their scale, quality, and speed. Every computer system and every bit of "secure" data could become vulnerable to attack from quantum-equipped nefarious actors. The World Economic Forum "estimate(s) that over 20 billion digital devices will need to be either upgraded or replaced in the next 10-20 years to use the new forms of quantum-resistant encrypted communication. We recommend that organizations start planning for this now.”
What constitutes "adequate size" might give us some false comfort: a 2019 study suggested that a computer with 20 million qubits would take eight hours to break modern encryption. Today's quantum computers are on the order of only 100 qubits. But while that implies that the threat is in the distant future, one must consider that a bad actor doesn't need to wait for the massive quantum system to materialize. The "Steal now, crack later" approach leads to a latent future security threat. Consequently, organizations should deploy quantum-safe security as soon as possible to minimize future risk.
Stopping Quantum Attacks Before They Begin
Consequently, the National Institute of Standards and Technology (NIST), a bureau of the U.S. Department of Commerce, has been conducting an ongoing search for quantum-safe security algorithms that are both secure and efficient. After all, we need our laptops, cars, and mobile phones to also be able to resist attacks from quantum-equipped bad actors. After four rounds of submissions, NIST selected four algorithms from a slate of 82 candidates. IBM Research had submitted 3 of the four chosen algorithms. All submissions have been subjected to research by industry scrutiny by government agencies, academic scientists, and mathematicians. This process is now reaching its conclusion; the NIST is expected to publish standards based on these 4 algorithms sometime in 2024.
The NIST contest covers the two aspects of security that could be vulnerable to quantum computing: public key encapsulation (used for public-key encryption and key establishment) and digital signatures (used for identity authentication and non-repudiation). For the former, NIST selected the CRYSTALS-Kyber algorithm. NIST selected three algorithms for signatures: CRYSTALS-Dilithium, FALCON, and SPHINCS+, with CRYSTALS-Dilithium as the primary algorithm in the signature category.
The Telco Industry Steps Up to Address Quantum Safe
On September 29, GSMA announced the formation of the GSMA Post-Quantum Telco Network Taskforce, of which IBM and Vodafone are initial members, to help define policy, regulation and operator business processes to enhance protections of telecommunications in a future of advanced quantum computing. Since virtually all organizations and sectors conduct commerce on the internet, and the 800 providers whose pipes that carry all the internet traffic, the Telco industry is a good place to start. We expect other sectors to follow suit, perhaps starting with banking, government, and health care.
IBM Adds Quantum-Safe Security to the IBM z16
Given the magnitude of the potential risks, and the predominance of IBM Z systems in security-critical applications, IBM has included future-proof digital signature support in its latest z16 mainframe using CRYSTALS-Kyber and CRYSTALS -Dilithium algorithms selected by NIST. z16 implements this algorithm across multiple layers of firmware to help protect business-critical infrastructure and data from future quantum attacks. IBM has said it is also working to bring these new methods to the broader market.
In addition, IBM has developed a multi-step process to assist clients toward rapidly making institutions quantum safe. The company works with clients to identify where they are vulnerable to quantum-based cryptography attacks, assess cryptographic maturity and dependencies, and identify near-term achievable cryptographic goals and projects. The risks clients may face vary substantially based on the type of applications and data an organization handles and the state of its current cryptography.
Quantum computing's potential threat to global information security may seem to be a distant and abstract risk. However, the inevitable advances of quantum technology and the "Steal now, crack later" approach bad actors are undertaking to make quantum-safe a genuine and pressing matter for vendors and IT organizations. IBM wasted no time bringing that technology to market in the IBM z16. IBM Research has contributed three of the four algorithms the NIST quantum-safe contest has selected to be the most viable, secure, and efficient of the 70 techniques evaluated.
Beyond the NIST-approved algorithms, IBM Is working to provide “crypto agility”, helping organizations not only replace the soon-to-fail existing algorithms but also transform their security practices to remain resilient as new threats emerge in the post-quantum world. Creating crypto observability, enabling ongoing monitoring and actions on crypto-related security items, will help keep the world safer from bad actors with virtually unlimited computing capacity at their disposal.
Disclosures: This article expresses the opinions of the authors, and is not to be taken as advice to purchase from nor invest in the companies mentioned. Cambrian AI Research is fortunate to have many, if not most, semiconductor firms as our clients, including Blaize, Cerebras, D-Matrix, Esperanto, FuriosaAI, Graphcore, GML, IBM, Intel, Mythic, NVIDIA, Qualcomm Technologies, Si-Five, SiMa.ai, Synopsys, and Tenstorrent. We have no investment positions in any of the companies mentioned in this article and do not plan to initiate any in the near future. For more information, please visit our website at https://cambrian-AI.com.
Wed, 28 Sep 2022 12:00:00 -0500Karl Freundentext/htmlhttps://www.forbes.com/sites/karlfreund/2022/09/29/ibm-research-prepares-for-a-world-safe-from-quantum-attacks/Killexams : IBM: A High-Yielding Income Generation Idea Worth A Look
By The Valuentum Team
International Business Machines Corporation (NYSE:IBM) has become a fundamentally different business in the past few years, one focused on providing hybrid cloud computing offerings. The company is a stellar free cash flow generator which enables IBM to reward investors via generous dividend increases, with shares of IBM yielding ~5.1% as of this writing. Substantial near-term headwinds remain, largely due to the various exogenous shocks seen of late (such as major inflationary pressures, rising interest rates, supply chain hurdles, and raging geopolitical tensions), though IBM is still worth considering as a high-yielding income generation idea.
IBM's Key Investment Considerations
IBM solves business problems via integrated hardware/software solutions that leverage IT and its knowledge of business processes. Its solutions help reduce a client's costs or enable new capabilities that generate revenue. The company was founded in 1924 and is headquartered in New York.
Back in 2019, IBM bought Red Hat (a top provider of open source cloud software) through a ~$34 billion deal which made IBM a contending hybrid cloud provider. IBM is looking to seize what it describes as a ~$1 trillion hybrid cloud opportunity, and recent growth in this area has been encouraging. IBM's revamped management team is working hard to turn things around after the company made various blunders during the 2010s decade. Its current Chairman and CEO, Arvind Krishna, has done a solid job righting the ship at IBM since taking on the top role in 2020.
In November 2021, IBM spun off its legacy business tax-free to shareholders as a new publicly traded entity, Kyndryl Holdings, Inc. (KD). Initially, IBM retained a 19.9% stake in Kyndryl though the firm intends to exit that position within 12 months of the spinoff.
On July 18, IBM reported earnings for the second quarter of 2022 that beat both consensus top- and bottom-line estimates. Its GAAP revenues rose by 9% year-over-year to hit $15.5 billion with strong growth at its Red Hat, various consulting services, and hybrid infrastructure offerings being key here. When removing foreign currency headwinds arising from the strong US dollar seen of late from the picture, IBM's non-GAAP constant currency revenues were up 16% year-over-year last quarter. IBM's portfolio optimization efforts are having a very powerful impact on its financial performance.
The firm's GAAP gross margin fell by ~185 basis points year-over-year last quarter, falling down to 55.4%. However, economies of scale helped drive its GAAP income from continuing operations up by 81% year-over-year in the second quarter, rising to $1.5 billion. There is some noise here due to the separation of IBM's legacy businesses (via the spinoff of Kyndryl) from its core operations. Keeping that noise in mind, IBM's underlying operations have performed quite well of late.
During its second quarter earnings call, IBM's management team noted the firm now forecasted that its full-year free cash flows would come in near $10.0 billion in 2022, at the low end of its previous forecast. IBM generated $3.6 billion in free cash flow (defined as net operating cash flow less 'payments for property, plant, and equipment' and 'investment in software') while spending $3.0 billion covering its dividend obligations during the first half of 2022. Its modest share repurchases during this period were related to tax withholding purposes as the new IBM is focused on retaining cash to invest in the business. We appreciate that IBM's dividend obligations remain well-covered by its traditional free cash flows.
The company exited June 2022 with a net debt load of $42.8 billion (inclusive of short-term debt, exclusive of restricted cash). One of the biggest risks to IBM's dividend is its large net debt load. IBM had $7.6 billion in cash, cash equivalents, and current marketable securities on hand at the end of June 2022 which provides the company with ample liquidity to meet its near-term funding needs.
IBM continues to expect that its constant currency revenues will grow decently this year (in the mid-single digit range), though sustained foreign currency headwinds are expected to offset strong demand for its offerings, to a degree. Over the long haul, we forecast that under its new management team, IBM will return to stable revenue growth which in turn should see the company's free cash flows swell higher. That would allow IBM to boost its dividend in a sustainable manner going forward, though we caution that its net debt load could limit the size of any future payout increases.
The Dividend Cushion Ratio Deconstruction, shown in the image up above, reveals the numerator and denominator of the Dividend Cushion ratio. At the core, the larger the numerator, or the healthier a company's balance sheet and future free cash flow generation, relative to the denominator, or a company's cash dividend obligations, the more durable the dividend.
The Dividend Cushion Ratio Deconstruction image puts sources of free cash in the context of financial obligations next to expected cash dividend payments over the next 5 years on a side-by-side comparison. Because the Dividend Cushion ratio and many of its components are forward-looking, our dividend evaluation may change upon subsequent updates as future forecasts are altered to reflect new information.
In the context of the Dividend Cushion ratio, IBM's numerator is smaller than its denominator, which suggests weak forward-looking dividend coverage. However, given IBM's strong and stable cash flow profile, we view its forward-looking dividend coverage favorably when considering IBM's ability to tap capital markets into account. Should IBM stumble for any reason, its ability to make good on its payout may be in danger.
IBM's Economic Profit Analysis
The best measure of a firm's ability to create value for shareholders is expressed by comparing its return on invested capital ['ROIC'] with its weighted average cost of capital ['WACC']. The gap or difference between ROIC and WACC is called the firm's economic profit spread. IBM's 3-year historical return on invested capital (without goodwill) is 41.6%, which is above the estimate of its cost of capital of 9.2%.
In the chart down below, we show the probable path of ROIC in the years ahead based on the estimated volatility of key drivers behind the measure. The solid grey line reflects the most likely outcome, in our opinion, and represents the scenario that results in our fair value estimate. Assuming IBM's recent portfolio optimization efforts go as planned, the firm's ability to generate shareholder value (which historically has been impressive) should continue to improve.
IBM's Cash Flow Valuation Analysis
Our discounted cash flow process values each firm on the basis of the present value of all future free cash flows, net of balance sheet considerations. We think IBM is worth $136 per share with a fair value range of $101-$171 per share. Shares of IBM are trading moderately below our fair value estimate as of this writing.
The near-term operating forecasts used in our enterprise cash flow model, including revenue and earnings, do not differ much from consensus estimates or management guidance. Our model reflects a compound annual revenue growth rate of 3.4% during the next five years, a pace that is higher than the firm's 3-year historical compound annual growth rate of -10.3%.
Our model reflects a 5-year projected average operating margin of 17.6%, which is above IBM's trailing 3-year average. Beyond Year 5, we assume free cash flow will grow at an annual rate of 2% for the next 15 years and 3% in perpetuity. For IBM, we use a 9.2% weighted average cost of capital to discount future free cash flows.
IBM's Margin of Safety Analysis
Although we estimate IBM's fair value at about $136 per share, every company has a range of probable fair values that's created by the uncertainty of key valuation drivers (like future revenue or earnings, for example). After all, if the future were known with certainty, we wouldn't see much volatility in the markets as stocks would trade precisely at their known fair values.
In the graphic up above, we show this probable range of fair values for IBM. We think the firm is attractive below $101 per share (the green line), but quite expensive above $171 per share (the red line). The prices that fall along the yellow line, which includes our fair value estimate, represent a reasonable valuation for the firm, in our opinion.
The steady decline in IBM's legacy business since 2010 represents a major reason why the firm spun off Kyndryl in November 2021. Going forward, IBM will need to prove that as a leaner and more focused enterprise, it can maintain solid revenue and operating income growth over the long haul. We think that will be the case, though substantial near-term headwinds remain. Investors looking for an income generation idea backed up by a strong cash flow profile should take a closer look at IBM.
The overall sentiment of these big-money traders is split between 27% bullish and 72%, bearish.
Out of all of the special options we uncovered, 7 are puts, for a total amount of $1,280,392, and 4 are calls, for a total amount of $243,682.
What's The Price Target?
Taking into account the Volume and Open Interest on these contracts, it appears that whales have been targeting a price range from $105.0 to $165.0 for IBM over the last 3 months.
Volume & Open Interest Development
Looking at the volume and open interest is an insightful way to conduct due diligence on a stock.
This data can help you track the liquidity and interest for IBM's options for a given strike price.
Below, we can observe the evolution of the volume and open interest of calls and puts, respectively, for all of IBM's whale activity within a strike price range from $105.0 to $165.0 in the last 30 days.
IBM Option Volume And Open Interest Over Last 30 Days
Biggest Options Spotted:
Total Trade Price
Total Trade Price
Where Is IBM Standing Right Now?
With a volume of 2,052,099, the price of IBM is up 1.05% at $118.99.
RSI indicators hint that the underlying stock may be approaching oversold.
Next earnings are expected to be released in 8 days.
What The Experts Say On IBM:
Morgan Stanley has decided to maintain their Overweight rating on IBM, which currently sits at a price target of $152.
Options are a riskier asset compared to just trading the stock, but they have higher profit potential. Serious options traders manage this risk by educating themselves daily, scaling in and out of trades, following more than one indicator, and following the markets closely.
If you want to stay updated on the latest options trades for IBM, Benzinga Pro gives you real-time options trades alerts.
Tue, 11 Oct 2022 13:56:00 -0500text/htmlhttps://www.benzinga.com/markets/options/22/10/29224106/ibm-whale-trades-spottedKillexams : IBM’s former CEO downplays the importance of a college degree for six-figure earning ‘new collar’ jobs that now make up half of its workers
A four-year bachelor’s degree has long been the first rung to climbing America’s corporate ladder.
“I really do believe an inclusive diverse workforce is better for your company, it’s good for the business,” Ginni Rometty, former IBM CEO, told Fortune Media CEO Alan Murray during a panel last month for Connect, Fortune’s executive education community. “That’s not just altruistic.”
Under Rometty’s leadership in 2016, tech giant IBM coined the term “new collar jobs” in reference to roles that require a specific set of skills rather than a four-year degree. It’s a personal commitment for Rometty, one that hits close to home for the 40-year IBM veteran.
When Rometty was 16, her father left the family, leaving her mother, who’d never worked outside the home, suddenly in the position to provide.
“She had four children and nothing past high school, and she had to get a job to…get us out of this downward spiral,” Rometty recalled to Murray. “What I saw in that was that my mother had aptitude; she wasn’t dumb, she just didn’t have access, and that forever stayed in my mind.”
When Rometty became CEO in 2012 following the Great Recession, the U.S. unemployment rate hovered around 8%. Despite the influx of applicants, she struggled to find employees who were trained in the particular cybersecurity area she was looking for.
“I realized I couldn’t hire them, so I had to start building them,” she said.
Through P-TECH, Rometty visited “a very poor high school in a bad neighborhood” that received the company’s support, as well as a community college where IBM was offering help with a technology-based curriculum and internships.
“Voilà! These kids could do the work. I didn’t have [applicants with] college degrees, so I learned that propensity to learn is way more important than just having a degree,” Rometty said.
Realizing the students were fully capable of the tasks that IBM needed moved Rometty to return to the drawing board when it came to IBM’s own application process and whom it was reaching. She said that at the time, 95% of job openings at IBM required a four-year degree. As of January 2021, less than half do, and the company is continuously reevaluating its roles.
For the jobs that now no longer require degrees and instead rely on skills and willingness to learn, IBM had always hired Ph.D. holders from the very best Ivy League schools, Rometty told Murray. But data shows that the degree-less hires for the same jobs performed just as well. “They were more loyal, higher retention, and many went on to get college degrees,” she said.
Rometty has since become cochair of OneTen, a civic organization committed to hiring, promoting, and advancing 1 million Black individuals without four-year degrees within the next 10 years.
If college degrees no longer become compulsory for white-collar jobs, many other qualifications—skills that couldn’t be easily taught in a boot camp, apprenticeship program, or in the first month on the job—could die off, too, University of Virginia Darden School of Business professor Sean Martin told Fortunelast year.
“The companies themselves miss out on people that research suggests…might be less entitled, more culturally savvy, more desirous of being there,” Martin said. Rather than pedigree, he added, hiring managers should look for motivation.
That’s certainly the case at IBM. Once the company widened its scope, Rometty said, the propensity to learn quickly became more of an important hiring factor than just a degree.
IBM continues to spend millions to buy hybrid cloud companies, as the company makes its sixth acquisition in 2022 with Dialexa.
IBM continues to spend millions on buying hybrid cloud companies with the unveiling of its acquisition of engineering consulting specialist Dialexa to boost its cloud charge.
Since IBM CEO Arvind Krishna took the reins in April 2020, IBM has acquired more than 25 companies, including many hybrid cloud businesses.
In February alone, IBM acquired cloud consultant services standout Sentaca, as well as Microsoft Azure consultancy all-star Neudesic—with the two purchases squarely aimed at boosting IBM’s hybrid and multi-cloud services capabilities.
Looking at the Armonk, N.Y.-based company’s purchase of Dialexa, IBM will gain 300 skilled product managers, designers, full-stack engineers and data scientists. Dialexa will become part of IBM’s Consulting business unit, which spearheads the company’s digital product engineering services in the Americas.
“Dialexa’s product engineering expertise, combined with IBM’s hybrid cloud and business transformation offerings, will help our clients turn concepts into differentiated product portfolios that accelerate growth,” said John Granger, senior vice president of IBM Consulting, in a statement.
Krishna:Hybrid Cloud A ‘Competitive Advantage’
Dialexa marks IBM’s sixth purchase in 2022 with the goal of boosting its hybrid cloud and artificial intelligence abilities.
Along with buying Dialexa, Sentaca and Neudesic, IBM has also acquired Randori, an attack surface management cybersecurity specialist that helps protect hybrid cloud environments.
Earlier this year, IBM’s CEO said hybrid cloud and artificial intelligence are top of mind for his company in terms of investment and the future.
“We are integrating technology and expertise—from IBM, our partners and even our competitors—to meet the urgent needs of our clients, who see hybrid cloud and AI as crucial sources of competitive advantage,” Krishna said in March. “And we are ready to be the catalyst of progress for our clients as they pursue the digital transformation of the world’s mission-critical businesses.”
In 2021, IBM’s hybrid cloud revenue jumped 19 percent compared with 2020, comprising 35 percent of its total revenue.
IBM’s Acquisition Of Dialexa
Based in Dallas and Chicago, Dialexa delivers a suite of digital product engineering services to help customers create transformative products to drive business outcomes.
Dialexa’s 300-strong engineers and skilled IT experts advise and create custom digital products for customers, which include Deere & Company, Pizza Hut U.S. and Toyota Motor North America. Financial terms of the Dialexa deal were not disclosed.
IBM said Dialexa provides deep experience delivering end-to-end digital product engineering services consisting of strategy, design, build, launch and optimization services across cloud platforms including Amazon Web Services and Microsoft Azure.
“Digital product engineering represents the tip of the spear for competitive advantage,” said Dialexa CEO Scott Harper in a statement. “IBM and Dialexa’s shared vision for delivering industry-defining digital products could be a game-changer.”
Mark Haranas is an assistant news editor and longtime journalist now covering cloud, multicloud, software, SaaS and channel partners at CRN. He speaks with world-renown CEOs and IT experts as well as covering breaking news and live events while also managing several CRN reporters. He can be reached at firstname.lastname@example.org.
Fri, 23 Sep 2022 09:04:00 -0500entext/htmlhttps://www.crn.com/news/cloud/ibm-s-cloud-acquisition-charge-continues-with-dialexaKillexams : 3 Reasons IBM Is a Surprisingly Strong Buy
There's no denying it: This year's been a pretty lousy one for the market. The S&P 500(^GSPC2.86%) is down 23% year to date, and is sitting within easy reach of a new 52-week low. Blame the rout suffered by several key technology stocks, mostly, paving the way for most other equities.
There's a curious exception to this market-wide and tech sector weakness that's worth noting. IBM(IBM2.26%) is holding up surprisingly well in the otherwise miserable environment. And it's arguably doing so for all the right reasons despite the specter of a recession. Here are the top three reasons.
1. Diversified business lines that are perpetually in demand
If the economy sours enough, it will take a toll on all businesses, with corporations being forced into extreme austerity. That's a worst-case scenario that doesn't seem a likely threat to IBM, though.
The company might not be positioned for significant growth, but it is positioned to generate revenue in almost any economic environment. Around one-third of its revenue stems from consulting work, while more than one-third comes from software sales.
These aren't your typical consulting and software businesses, however. Much of it is contractual, meaning its client companies have pre-arranged access to employees or software for a specified period of time. Its annualized recurring software revenue, for example, now stands at $12.9 billion, making up roughly half of its current yearly software sales. Moreover, its software includes cybersecurity, data analysis, artificial intelligence, hybrid cloud computing, and transaction processing. These are service-based software suites that most of its customers rely on in a big way.
The kicker: CFO James Kavanaugh said a couple of years ago, "[For every $1 worth of business on a hybrid cloud platform], another $3 to $5 is spent on software and another $6 to $8 on the cloud services." In other words, sales of hardware drive long-term software and consulting revenue, yet IBM's unique software and consulting offerings also drive hardware sales. It's a self-powering virtuous cycle.
IBM's solutions aren't something major enterprises can easily replace or simply stop using. In fact, the company argues that technology becomes an even more important growth driver when stagflation stifles traditional growth efforts.
2. IBM is making smart business-building acquisitions
Many companies make acquisitions to increase their revenue without much thought about where or how they fit in. But IBM's deals are made with purpose rather than rooted in status and stature. For instance, in July, the company announced its purchase of Databand.ai, adding the ability to spot errant digital data to the company's data-management arm. Earlier this year, it bought Neudesic, which operates a hybrid cloud consulting business specializing in Microsoft's Azure cloud platform.
None of the six deals the company has made this year have been particularly high-profile acquisitions. Neither have any of the other 20-plus acquisitions CEO Arvind Krishna has directed since taking the helm from Ginni Rometty in early 2020. IBM hasn't made any large-scale deals since buying Red Hat in 2019, in fact. But the smaller companies it's scooping up make its products more marketable.
While the recent acquisitions have been relatively small, analysts at Evercore ISI(EVR2.42%) suggest IBM could be mulling an acquisition worth as much as $30 billion, potentially pushing the company into an all-new line of business that creates synergy with its existing ones.
3. A little something is better than a lot of nothing
Lastly, IBM might never dish out enormous organic growth again, but it offers something even more valuable to investors amid economic weakness: a healthy dividend. It currently yields 5.2%, and given the consistent recurring revenue of much of its business as well as how well its payouts are covered, there's no reason to fear this dividend is in jeopardy.
Investors in tune with the company's fiscals might not completely agree. Last fiscal year, IBM dished out $6.55 per share in dividends, but the company only earned $6.41 per share. That's clearly not sustainable.
But it was a year complicated by COVID-19 and more corporate restructuring. In November, IBM completed the spinoff of its managed infrastructure business now called Kyndryl(KD4.43%). While spinoffs don't technically incur direct operational costs, they can often take an indirect toll on a company's focus and ability to adapt to changing market conditions. IBM hasn't exactly escaped inflationary pressures and the fallout from broken supply chains, either.
Regardless, the company's bottom line is growing again. Analysts collectively expect per-share earnings of $9.34 this year, followed by an improvement to $10.05 next year. That's far more than enough to continue funding the dividend and extend its 27-year streak of annual dividend growth.
Dividends may not be your thing. Amid economic uncertainty, though, collecting good income becomes a pretty big deal.
Wed, 28 Sep 2022 18:03:00 -0500James Brumleyentext/htmlhttps://www.fool.com/investing/2022/09/29/3-reasons-ibm-is-a-surprisingly-strong-buy/Killexams : See Which Of The Latest 13F Filers Holds IBMNo result found, try new keyword!In terms of shares owned, we count 6 of the above funds having increased existing IBM positions from 06/30/2022 to 09/30/2022, with 2 having decreased their positions. Looking beyond these ...Thu, 13 Oct 2022 02:26:00 -0500text/htmlhttps://www.nasdaq.com/articles/see-which-of-the-latest-13f-filers-holds-ibm-1Killexams : IBM: The Most Innovative and Prizewinning Tech Company
Founded in 1911 as a Computing-Tabulating-Recording Company, International Business Machines (IBM) needs to keep its finger on the pulse of the development of information technology not to be ousted by younger tech giants like Google, Microsoft, Apple, and Amazon. With the advent of the internet, IBM needed to widen the spectrum of its products and services to retain its strong position in the tech field. Although the company lost its dominance, having only a 5% market share in 2021, as opposed to 68% shared by Microsoft, Amazon, and Google, it has many spectacular achievements to its credit. IBM holds more patents than any other technology company and takes pride in employees who have earned five Nobel Prizes, four Turing Awards, five National Medals of Technology, and five National Medals of Science. And it had been the top tech company for longer than any of the titans dominating the market now.
Also called “Big Blue,” IBM indeed has an impressive pedigree. After starting to produce hardware at the beginning of the last century, it thrived in this business for decades and became the leading provider of mainframe computers worldwide. IBM’s gross income had inexorably grown in the last part of the twentieth century, expanding from $14.450 billion earned in 1975 to $71.940 billion made in 1995. The company’s revenue skyrocketed to the record level of $106.9 billion in 2011, after which it has steadily been declining amidst its transition into new technologies and lines of business. To move with the times and survive the competition from other tech titans, IBM gradually shifted its focus from hardware to software and services. It began to devote more energy and money to cloud-based services and cognitive computing. IBM focuses now on offering primarily network services, application services, cloud services, digital workplace services, business processes and operations, technology consulting services, and AI services. IBM Watson, a cognitive system capable of answering questions posed in natural language, has become the company’s high-visibility offering in the technology field. IBM has a strong faith in Watson, promoting the system as a benevolent digital assistant that would help hospitals, offices, factories, and farms. The company’s white paper referred to Watson as “the future of knowing.”
To see how well IBM has prepared for, what it calls, the new age of understanding, study the statistical data presented below.
In 1891, IBM, then called CTR, invented the computing scale that could show both the weight and the proportionate price of the product simultaneously.
In 1888, the company invented the Time Clock, a device that records start and end times for hourly employees. Then, it designed the punch card base data processing machines. IBM is also responsible for inventing the magnetic stripe technology and the Universal Product Code.
IBM designed and developed the first smartphone in the world, launching it in November 1992. Designed by IBM and manufactured by Mitsubishi Electric, the device had a touchscreen, a calculator app, email capability, 2 MB RAM, and 2 MB internal storage. There were about 50,000 of these smartphones sold for $899 a unit.
IBM also revolutionized the computer industry, inventing DRAM, floppy disk, SQL programming language, ATMs, and hard disk drives.
IBM also invented the first personal computer, known as the IBM PC. It was launched in August 1981 and acquired by many companies before PCs were commercialized.
Since 1920, IBM has received 151,302 US patents. In 2019, the company received a staggering amount of 9,262 US patents. A year later, IBM beat the record of most US patents received by a business for 27 consecutive years. In 2021, IBM had 1,811 patents granted, while this year it has so far received 492 patents.
IBM has long worked with NASA. Although IBM contributed to many missions, the most memorable is landing on the Moon in 1969. IBM’s responsibility was to develop the software and various programs, build computers, and streamline the mission for NASA.
One of the fascinating inventions of IBM is the Scanning Tunnelling Microscope developed in 1981 for imaging at the atomic level. Gerd Binnig and Heinrich Rohrer received the Noble Prize in Physics in 1986 for the invention.
IBM developed several chess computers, the most popular of which is Deep Blue. In 1996, Deep Blue beat the chess world champion, Garry Kasparov, who accused IBM of cheating. IBM declined Kasparov’s offer of a rematch.
IBM invented the ASME (The Anatomic and Symbolic Mapper Engine) that offers a 3D interactive avatar of the human body to doctors in real-time, helping them visualize patients’ medical records.
Big Blue made LASIK eye surgery mainstream.
The company invented the IBM 2990 Blood Cell Separator, designed to harvest white blood cells from blood donors to support patients with leukemia. Later, IBM engineers improved the device, introducing its more sophisticated version, IBM 2997.
IBM offers the IBM LinuxONE for cloud computing solutions. This powerful computer system can manage the work of 1000×86 servers simultaneously on a single platform.
IBM Statistics in 2022
Over 90% of credit card transactions are processed by IBM mainframes.
About 80% of global retailers use IBM retail solutions in their stores and for online sales.
Over 80% of travel reservations are processed through an IBM product.
Nearly 97% of banks worldwide use IBM products.
There are 245,000 IBM employees worldwide in 2022.
IBM employees live in 170 countries.
There are 130,000 IBM employees in India.
3,000 researchers are working in IBM’s fifteen laboratories around the world.
During the pandemic, between 2020 and 2021, IBM reduced the number of its employees by around 0.24%.
Over 29% of IBM managers are women.
There are an average of 108 applications per available job position at the company.
Every day, IBM handles 70 billion security events.
Every second, it manages 8.18 million security events.
Over 27.3 million people use the IBM website every month.
Almost half of IBM’s revenue is generated in the North American market.
IBM bought Red Hat for $33.4 billion.
Cognos was purchased by IBM for $4.9 billion in 2008.
Big Blue acquired SoftLayer Technologies in 2013 reportedly for $2 billion.
To date, IBM has acquired more than 183 companies.
Facts about IBM’s Incumbent CEO, Arvind Krishna
Arvind Krishna became IBM’s CEO in 2020, arriving with the mission to reverse the company’s decline. He is expected to create a new line of business that would rediscover IBM’s former glory.
Before becoming the company’s CEO, Krishna worked as the Senior Vice President for IBM’s cloud and cognitive software. He developed IBM’s security software business.
Krishna was the general manager of IBM Systems and Technology Group’s development and manufacturing organization. He also managed IBM’s acquisition of Red Hat and supervised its synergy with IBM.
Krishna is the co-author of 15 patents and has been the editor of IEEE and ACM journals. He has received distinguished alumni awards from IITK and the University of Illinois, where he completed his PhD. His scholarly articles appear in numerous journals.
Krishna leads the IBM business unit that provides the cloud and data platform. His responsibilities include IBM Research, IBM Cloud, and IBM’s security and Cognitive Application business.
Krishna guides IBM’s overall strategy in core and emerging technologies including AI, quantum computing, blockchain, cloud platform services, data-driven solutions, and nanotechnology.
IBM Chairman and CEO Arvind Krishna was paid $17.5 million for 2021, up from $17 million paid in the year before, according to IBM’s 2022 Notice of Annual General Meeting and Proxy Statement.
In 2021, IBM’s board approved an annual incentive payment of $2.9 million to Krishna for the 2021 performance, which was 98% of the target.
The estimated net worth of Arvind Krishna was about $27.4 million in June 2022. He also owns over 21,803 units of International Business Machines stock worth over $23,629,581.
Once an unparalleled tech giant, IBM has been struggling for the last decade. It had to adjust to the changing world by selling its low-margin businesses and investing in high-margin ones. To implement its strategies, Big Blue sold IBM WebSphere Commerce to HCL Technologies in 2018 and a part of the Watson Health business at the beginning of this year. Although IBM’s earnings are still high, they do not reach the levels hit between 2006 and 2012. The company’s annual revenue skyrocketed to $106.9 billion in 2011, whereas it was only $57 billion last year. In the second quarter of 2022, IBM’s earnings dropped below expectations. IBM’s falling fortune is reflected in the table below:
Big Blue has repeatedly changed the segment reporting to reflect its move away from being hardware, software, and service company towards becoming a cognitive solutions and cloud platform company. It changed its segment reporting in 2016, 2019, and 2021. The last change was dictated by IBM’s need to align its segment reporting with its platform-centric approach to hybrid cloud and AI. There are presently six segments in IBM’s business: Technology Services and Cloud Platforms, Infrastructure, Software, Consulting, Financing, and Other. In 2021, IBM’s software segment generated $24.14 billion of its global revenue of $57.35 billion. In 2022 so far, the Software division earned $5.77 billion and $6.2 billion, in the first and second quarters, respectively. The Consulting sector brought the company $4.83 billion in Q1 and $4.8 billion in Q2 of the current year. The revenue earned by the Infrastructure segment amounted to $3.22 billion in the first quarter and $4.0 billion in the second quarter. Revenues generated by IBM’s segments in the last two years are shown in the table below:
IBM’s Annual Revenue by Segment for 2020-2021 (in $US billion)
Worldwide Market Share of Cloud Infrastructure Providers in Q2 2022
In the second quarter of 2022, IBM’s Cloud Infrastructure had only a 4% share of the worldwide market, lagging behind Amazon, Azure, and Google Cloud. The spending on global cloud infrastructure services soared to $55 billion and thus brought the industry’s total for the twelve months to more than $203.5 billion. Outshining IBM, Amazon and Microsoft together accounted for more than half of cloud infrastructure revenues in the three months that ended on June 30.
These figures show how much Big Blue fell from grace because, in the past, it used to enjoy the leading position. In 2017, IBM reported cloud revenue growth of 33% year-over-year in its first quarter earnings. In that quarter, its cloud revenue jumped to $3.5 billion. IBM’s total cloud revenue over the past 12 months that year hit $41.6 billion and catapulted IBM to the top of the list in the field of enterprise cloud. In the first quarter of 2017, today’s winners were obliged only to trail behind with lower earnings: Microsoft with $14 billion, Amazon with $12.20 billion, and Google with $10 billion. The latest market share of the main providers of cloud infrastructure can be seen in the table below:
Worldwide Market Share of Cloud Infrastructure Providers in Q2 2022
Net income is defined as a company’s net profit or loss after it has accounted for all its revenues, income items, and expenses. IBM’s net income for the quarter ending on June 30, 2022, was $1.292 billion, which constituted a 5.06% jump year-over-year. The company’s net profit for the 12 months ending on June 30, 2022, was $5.588 billion, demonstrating an increase of 4.76% year-over-year. Last year, IBM’s annual net income reached $5.743 billion, a 2.74% surge from 2020. The first year of the pandemic brought IBM a net income of $5.59 billion, which was a whopping 40.73% drop from 2019. In 2019, IBM’s annual net profit was $9.431 billion, an 8.05% advance from 2018. The uneven trajectory of IBM’s annual net income is drawn in the table below:
IBM’s Annual Net Income since 2009 (in $US Billion)
Net Income in $US Billion
IBM’s Number of Employees Worldwide from 2000 to 2022
IBM is the fifth largest employer in the United States. In 2021, the company employed 282,000 people worldwide. This year, the number of people working for Big Blue dipped to 245,000. As the company has lately been struggling, experiencing drops in its revenues, it is trying to restructure its business and be on par with such tech giants as Amazon, Microsoft, Google, and Apple. Hence the decline in the number of its employees this year. The table below shows how the number of IBM’s employees has changed over the years:
IBM’s Number of Employees Worldwide from 2000 to 2022 (in 1,000s)
As the world is facing a probable recession, analysts believe that the enterprise tech sector will still continue going strong. People who are tech-savvy will turn to IBM in these unpleasant times to help them survive in a tighter economic environment and use the company’s software, consulting, and infrastructure to work productively during an economic decline. Big Blue can definitely provide the products and services people will need in the near future. IBM’s Q2 2022 results signify that technology spending in such spheres as AI, cloud, automation and networking is steady. The company beat anticipated results in the second quarter and boasted its first double-digit quarterly revenue growth in more than a decade. Automatic calculations conducted at Coinpriceforecast.com inspire faith in the company’s future and the cost of its stock. At the beginning of the year, IBM’s stock price was $116.92. At the time of writing, IBM is trading at $118.81, thus demonstrating a 2% jump from January 2022. Coinpriceforecast.com foresees that by Christmas, IBM will surge to $138. In the first half of 2023, the price of the stock might advance to $145 and end the next year at $155, adding 30% to today’s price. Whether or not these predictions prove to be correct, IBM will surely continue pushing technology and innovation forward, as it has spectacularly done since the beginning of the twentieth century.
Mon, 10 Oct 2022 00:38:00 -0500Daniel Shvartsmanen-UStext/htmlhttps://www.investing.com/academy/statistics/ibm-facts/Killexams : IBM (IBM) Gains But Lags Market: What You Should Know
IBM (IBM) closed at $127.73 in the latest trading session, marking a +0.36% move from the prior day. This move lagged the S&P 500's daily gain of 0.69%. At the same time, the Dow added 0.64%, and the tech-heavy Nasdaq lost 0.2%.
Coming into today, shares of the technology and consulting company had lost 8.02% in the past month. In that same time, the Computer and Technology sector lost 14.62%, while the S&P 500 lost 9.94%.
Investors will be hoping for strength from IBM as it approaches its next earnings release. On that day, IBM is projected to report earnings of $1.88 per share, which would represent a year-over-year decline of 25.4%. Meanwhile, our latest consensus estimate is calling for revenue of $13.75 billion, down 21.96% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.39 per share and revenue of $59.9 billion. These totals would mark changes of +18.41% and -15.38%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for IBM. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.88% lower. IBM is currently a Zacks Rank #3 (Hold).
Digging into valuation, IBM currently has a Forward P/E ratio of 13.56. This represents a no noticeable deviation compared to its industry's average Forward P/E of 13.56.
Meanwhile, IBM's PEG ratio is currently 1.94. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Computer - Integrated Systems stocks are, on average, holding a PEG ratio of 1.77 based on yesterday's closing prices.
The Computer - Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 162, putting it in the bottom 36% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow IBM in the coming trading sessions, be sure to utilize Zacks.com.
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