IBM’s AI Consulting Business Expected to Grow by $1 Billion in 2024
IBM’s artificial intelligence (AI) projects are reportedly set to contribute to its continuing turnaround.
Bank of America has reiterated a Buy rating on IBM’s stock, highlighting the company’s defensive portfolio, attractive dividend yield and underappreciated AI portfolio, Seeking Alpha reported Thursday (Oct. 5).
IBM has been working on AI applications for specific verticals for decades, Bank of America analysts, led by Wamsi Mohan, noted, according to the report. In May, IBM unveiled watsonx, its AI and data platform, which allows customers to release foundation models and generative AI while storing and governing them in one place on any cloud environment. This platform is designed to make deploying AI capabilities significantly easier and more scalable for enterprises.
Bank of America maintained its price target of $160 for IBM’s stock, the report said. The analysts predict that AI will have a significant impact on IBM’s consulting business over the next two years, adding $1 billion in 2024 and $2 billion in 2025.
RBC Capital also recently started coverage on IBM with an outperform rating, expressing optimism about the company’s watsonx platform and the potential for further automation in the digital transformation of large companies, per the report.
About four months after unveiling watsonx, IBM announced on Sept. 7 that it is releasing new enhancements to the AI platform. The enhancements include “a technical preview for watsonx.governance, new generative AI data services coming to watsonx.data, and the planned integration of watsonx.ai foundation models across select software and infrastructure projects.”
A week earlier, on Aug. 31, IBM and Salesforce announced that they have teamed up to help clients adopt AI for customer relationship management, saying they aim to help customers of the two companies accelerate AI adoption while protecting their data.
In this collaboration, IBM Consulting will use its expertise and delivery models to guide customers as they adopt and deploy Salesforce’s AI technology. Clients can also get assistance via watsonx.
“We see how the need to increase employee productivity while simultaneously elevating the customer experience with speed, personalization and convenience has surged exponentially,” Matt Candy, IBM Consulting’s global managing partner for generative AI, said when announcing the partnership. Candy added that the partnership can “help empower enterprise clients to scale and accelerate the adoption of generative AI that will support them to meet their business needs.”
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