IBM's AI Platform Watson Positions Tech Giant for Growth
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IBM has an AI platform called Watson that can analyze data and create solutions for companies in industries like healthcare, customer service, and finance. This could drive IBM's future growth.
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Revenue is expected to grow at a 4.72% CAGR over the next 5 years based on Watson's AI applications. Profits are also expected to grow steadily.
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A DCF model values IBM's stock price at $214, representing 15.9% upside from current levels. This makes the stock a buy.
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IBM has a strong balance sheet with $14 cash per share and the ability to service its debt. The current ratio below 1 is not too concerning.
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IBM trades at a lower 2023 P/E ratio of 23x compared to peers. Its partnerships and competitive positioning in AI make it attractive.