IBM Bets on Open AI and Hybrid Cloud to Boost Growth
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IBM is leveraging partnerships and acquisitions like Kyndryl, Red Hat, and Meta to focus on open-source AI and hybrid cloud solutions. This is starting to pay off with strong Q4 results.
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The Meta partnership specifically allows IBM to integrate the powerful Llama 2 AI model into its Watsonx platform to boost capabilities.
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IBM believes open-source AI models are key for enterprise adoption due to transparency and trust around model weights/data privacy.
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The Red Hat acquisition gives IBM open-source hybrid cloud solutions to layer open-source AI models on top of.
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IBM currently trades at an inexpensive forward P/E multiple compared to competitors. If their new strategy works, shares could have 48% upside.