International Business Machines CorporationNYSE
Valuing IBM's Software Franchise
Zero Gravitas • 132 Comments
Zero Gravitas • 132 Comments
Tue, Dec. 6, 4:09 AM
- IBM Chief Executive Ginni Rometty is one of 16 business leaders, and the only tech CEO, who will advise Donald Trump as members of the President's Strategic and Policy Forum.
- The group will consult with Trump, who criticized IBM on the campaign trail for offshoring, as he implements his plans to stem the flow of U.S. jobs to other countries.
Thu, Dec. 1, 1:15 PM
- IBM's (IBM -1.8%) cloud-based Watson for Drug Discovery to aid Pfizer research in the field, the latter marking one of the initial organizations globally to deploy and customize the tool. Identification of new drug targets, combination therapies for study and patient selection programs through machine learning, natural language processing and other cognitive reasoning technologies represent primary aim of the collaboration.
- Press release
Tue, Nov. 29, 8:55 AM
- The world's largest airline, American Airlines, will migrate certain enterprise applications to IBM Cloud.
- IBM's cloud offering spans 50 data centers across 17 countries and enables application development through IBM Bluemix. The airline will additionally gain access to IBM's advanced analytics capabilities and associated technologies.
- IBM (NYSE:IBM) and American Airlines have maintained a relationship since the 1950s.
Tue, Nov. 22, 3:37 PM
- With $4.5B of short interest, Exxon Mobil (NYSE:XOM) leads the way, followed by IBM at $3.7B. Rounding out the top ten: AT&T (NYSE:T), Caterpillar (NYSE:CAT), Chevron (NYSE:CVX), Boeing (NYSE:BA), GE, Procter & Gamble (NYSE:PG), Abbot Labs (NYSE:ABT) and Disney (NYSE:DIS).
- Most interesting from that list are Cat, Boeing, and Abbot Labs as their market caps are significantly smaller than the other seven.
- Of the top 50 short positions, there are two names in which the short interest rises to as high as 10% of the market cap: Freeport-McMoRan (NYSE:FCX) and Digital Realty Trust (NYSE:DLR).
- Previously: Goldman's list of stock longs mattering most to hedge funds (Nov. 22)
Tue, Nov. 22, 4:48 AM
- IBM Cloud (NYSE:IBM) is making the largest commitment it has ever made to one country at a single point in time after tripling its cloud capacity in the U.K.
- The move will see Big Blue open four new data centers to keep pace with soaring client demand.
- It follows a better-than-expected third quarter for IBM, which saw its cloud as a service revenue reach $7.5B.
Wed, Nov. 16, 11:40 AM
- New facilities, services and software planned.
- A forthcoming global security headquarters, with the sector's first physical Cyber Range, located in Cambridge, Massachusetts, and other updated capabilities and capacity across the company's X-Force Command Centers (cited to handle 1 trillion security events per month) highlighted.
- Specialized incident response and intelligence consulting team labeled IBM X-Force Incident Response and Intelligence Services [IRIS] has also been formed and positioned throughout the world.
- IBM (IBM +0.1%) Security General Manager, Marc van Zadelhoff: "Being prepared to respond is the first line of defense in making sure a cyber security incident doesn't become a crisis. To adequately prepare for –and respond to – cyber attacks, companies need to assemble cross-functional teams that bring a strategic mix of security intelligence, technical skill, legal precision and regulatory understanding combined with a comprehensive plan of action. With our investments, we've moved IBM into a unique position in the industry with a comprehensive cybersecurity immune system for customers to build world-class capabilities for thwarting cybercrime."
- Furthermore inclusive of the overall investment, IBM's acquisition of Resilient Systems was announced earlier in the year.
Wed, Nov. 16, 9:52 AM
- The Los Angeles Auto Show is off and running this week, with technology companies stealing some of the early headlines.
- Samsung (OTC:SSNLF) got the ball rolling with its huge acquisition of Harman (NYSE:HAR), while Amazon dazzled many by showcasing its connected-car Blue Link technology that uses the AI-heavy Alexa in Hyundai cars.
- Ride sharing platforms are on display, led by BMW's Reach Now program which is a potential Uber (Private:UBER) X competitor.
- Edmunds.com may have sent a bit of shock wave through the auto retailer sector by demonstrating its advanced messaging platform that uses Facebook Messenger to help direct buyers to cars.
- Then there is Olli which is the first self-driving vehicle to use IBM (NYSE:IBM) Watson as its brains.
- There are plenty of new models on display at the Staples Center - including the Alfa Romeo Stelvio, Volkswagen e-Golf, Land Rover Discover, Porsche Panamera and Mazda CX-5. The first look at the Jaguar all-electric I-Pace SUV is one of the more talked about introductions.
- The all-electric Chevy Bolt and Tesla Model X mobile design studio will also be making an appearance in LA. Expect some updates on both as the GM vs. Tesla war starts to get ratcheted up.
- Related automobile sector stocks: GM, F, TM, FCAU, HMC, OTCPK:NSANY, TSLA, OTCPK:VLKAY, OTCPK:DDAIF, OTC:HYMLF, OTCPK:BMWYY, TTM, TSLA, AN, KMX, SONC.
Fri, Nov. 11, 4:12 PM
- Analyst Katy Huberty notes 37% of Apple's (NASDAQ:AAPL) market capitalization, or $216B, is held overseas and should a prospective 10% repatriation allowance occur, the company could save $54B in tax expense if it chooses to bring that sum back onshore.
- Should the theorized scenario play out, shareholder returns, debt reduction, substantial M&A and a combination of all of the above are cited to be on the table. Further notes, "It would likely also remove an overhang on the stock that has been in place for many years."
- Additionally identifies other potential beneficiaries on the hypothesis including NetApp (NASDAQ:NTAP), with 43% of its market capitalization offshore, Hewlett Packard Enterprise (NYSE:HPE), at 26%, HP (NYSE:HPQ), at 21%, Western Digital (NYSE:WDC), at 17%, and IBM (NYSE:IBM), at 6%. Does, however, also consider levels of international revenue exposure and the impact other forthcoming policies could have on these names, graphing out some related percentages in a model displayed here.
Thu, Nov. 10, 9:52 AM
- Analyst Wamsi Mohan attributes stabilized earnings, appealing dividend yield, expected 2017 tailwinds resulting from restructuring and a more moderate rate of investment expenses, SaaS revenue projected to comprise higher portion of growth, shares considers to be at a discount, and other factors.
- IBM (NYSE:IBM) price target increased from $170 to $185 (current price $158.61).
Wed, Nov. 9, 4:58 AM
- Donald Trump's call for a repatriation holiday of 10% for the more than two trillion dollars in corporate cash parked overseas is now closer to reality.
- He has also promised the biggest tax revolution since Ronald Reagan, pledging that no American business would pay more than 15% of their profits in tax, compared with a current maximum of 35%.
- Top 10 U.S. companies with cash overseas: MSFT, GE, AAPL, PFE, IBM, MRK, GOOG, GOOGL, JNJ, CSCO, XOM
Thu, Nov. 3, 8:24 AM
Mon, Oct. 31, 3:57 PM
- Brocade Communications (NASDAQ:BRCD) is up 22.3% and hanging right at 52-week high range after news that it's in talks to sell itself and getting close to the end of that process.
- A deal could be announced this week, Bloomberg reports, and one of the interested parties is reportedly Broadcom (AVGO +0.7%), which could be interested in supplementing its switch-chip business with Brocade's networking gear. Broadcom CEO Hock Tan has said he's interested in acquisitions.
- Such a deal might allow for better competition against much bigger rival Cisco Systems (CSCO +0.4%). "A purchase by Broadcom (Avago) would be a strategic move by Broadcom to vertically integrate in an IP switching and routing market that has increasingly moved to merchant silicon," notes Stifel analyst Aaron Rakers.
- He's maintained a Hold rating and $10 price target (the boost today has put Brocade at $10.63). He doesn't know any inside information about activity around Brocade this week but notes that for years, talk has persisted that Brocade might sell itself to suitors like H-P (NYSE:HPQ), Oracle (NASDAQ:ORCL) or IBM (NYSE:IBM).
- With current net debt (about $440M) and at $11/share, Brocade would come at about a $4.9B enterprise value, 7.3 times EBITDA, he says.
Wed, Oct. 26, 2:20 AM
- General Motors (NYSE:GM) and IBM are combining AI system Watson with the carmaker's OnStar connectivity service in an effort to market new services to drivers.
- The feature, called "OnStar Go," is set to debut early next year in more than 2M GM vehicles with 4G service.
- ExxonMobil, MasterCard and Parkopedia are among the first brands to join the platform.
Tue, Oct. 25, 11:54 AM
Tue, Oct. 25, 11:54 AM
- Regular quarterly cash divided of $1.40 per share, payable December 10 to shareholders on record November 10. Payment of consecutive quarterly dividends since 1916 highlighted.
- Additional $3B authorized for stock repurchase program, bringing overall program sum to $6B.
- IBM (IBM -0.2%) chairman, president and CEO Ginni Rometty: "IBM continues to invest in our business for long-term growth, and the company has already invested more than $12 billion in the first three quarters of 2016 to build higher-value offerings. At the same time we remain committed to returning capital to shareholders through both dividends and share repurchase."
- Press release
Wed, Oct. 19, 1:40 PM
- Through a partnership with China-based 21Vianet Group (VNET +0.5%), IBM (IBM +0.4%) intends to bring blockchain, IoT and advanced data services to its Bluemix cloud platform. Opportunities in the country's manufacturing and financial services industries along with those among enterprise networks and startups are highlighted.
- IBM: "Today’s launch of blockchain and our IoT platform through the IBM Cloud is a tremendous boon for Chinese companies. Providing the infrastructure of Bluemix, combined with these latest technologies from both IBM and a growing roster of partners and Chinese service providers, will equip our country’s developers with the set of tools they need to fuel more intelligent and advanced innovations across China’s fastest-growing industries, including manufacturing and financial services.”
- Further, IBM and Cisco Systems additionally expand an existing global partnership to offer real-time data analytics services to Chinese companies managing remote operations (i.e. oil rigs, factories, mines, shipping).
- IBM had partnered with 21Vianet last October through a Bluemix access/infrastructure swap. Today's arrangement looks to expand the Bluemix ecosystem in China even further as the country's growing population of developers warrants increased focus on providing access to advanced cloud technologies.