Shares of International Business Machines Corp (IBM - Free Report) surged 13.1% on a year-to-date basis compared with the S&P 500’s return of 4.1%. The improvement suggests that IBM’s investments in cloud computing, Big Data, mobile and security have started to gain steam.
We note that IBM’s expanding cloud-based product portfolio continues to attract new customers. Of late, global adoption of the company’s cloud-based products has been quite robust, as validated by the plethora of contract wins.
Cloud-based offerings Key Catalyst
Recently, IBM announced continuing global adoption for Aspera Files, one of its software-as-a-service (SaaS) offerings. The multi-tenant solution accelerates the sharing and transfer of large files and directories. This feature makes it a must-have solution for global media and entertainment companies who want to speed-up content collaboration and distribution.
In recent times, the hybrid solution has been selected by the likes of Beelink Productions in Dubai, action concept in Germany and Outpost VFX in the UK.
Most recently, musical instrument company Roland Corporation selected IBM Cloud Video's Ustream platform to live stream its historic, 24-hour international music festival and product launch. IBM Cloud Video offers Clearleap and Ustream, a powerful portfolio of video services that spans open API development, digital and visual analytics, simplified management and consistent delivery across global industries.
IBM Cloud Video supports a number of media and enterprise companies including HBO, A+E Networks, BBC America, Scripps Networks Interactive, and Verizon (VZ - Free Report) .
Increasing Cloud Revenues
The expanding customer base and the recent contract wins indicate increasing market penetration by IBM. In the last reported quarter, “Strategic Imperatives” revenues grew 12% year over year to $8.3 billion and formed over 40% of total revenues with Cognitive solutions reporting growth of 3.5%.
Cloud revenues surged 30%, but most importantly, the annual run rate for IBM's cloud-based solutions was up $2.2 billion from the year-ago quarter to $6.7 billion.
As per a Jul 2016 IDC report, cloud IT infrastructure spending is expected to increase at a 5-year CAGR of 13.1%, hitting $59.5 billion by 2020. IDC estimates cloud IT infrastructure spending to be 48.7% of total expenditure on enterprise IT infrastructure by 2020. All these spell big opportunity for IBM.
Further, collaborations with the likes of Workday present significant growth opportunity in the long haul. Nevertheless, IBM’s revenues are likely to remain affected in the near term due to intensifying competition in the cloud computing & data analytics arenas.
Zacks Rank & Key Picks
Currently, International Business Machines has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader technology sector include Autobytel Inc. and Stamps.com Inc. . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Interested in IPOs? Check out the special edition of Zacks Friday Finish Line below, where Editor Maddy Johnson and Content Writer Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in 2016 (see part two here).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Shares of International Business Machines Corp (IBM - Free Report) surged 13.1% on a year-to-date basis compared with the S&P 500’s return of 4.1%. The improvement suggests that IBM’s investments in cloud computing, Big Data, mobile and security have started to gain steam.
We note that IBM’s expanding cloud-based product portfolio continues to attract new customers. Of late, global adoption of the company’s cloud-based products has been quite robust, as validated by the plethora of contract wins.
Cloud-based offerings Key Catalyst
Recently, IBM announced continuing global adoption for Aspera Files, one of its software-as-a-service (SaaS) offerings. The multi-tenant solution accelerates the sharing and transfer of large files and directories. This feature makes it a must-have solution for global media and entertainment companies who want to speed-up content collaboration and distribution.
In recent times, the hybrid solution has been selected by the likes of Beelink Productions in Dubai, action concept in Germany and Outpost VFX in the UK.
Most recently, musical instrument company Roland Corporation selected IBM Cloud Video's Ustream platform to live stream its historic, 24-hour international music festival and product launch. IBM Cloud Video offers Clearleap and Ustream, a powerful portfolio of video services that spans open API development, digital and visual analytics, simplified management and consistent delivery across global industries.
IBM Cloud Video supports a number of media and enterprise companies including HBO, A+E Networks, BBC America, Scripps Networks Interactive, and Verizon (VZ - Free Report) .
Increasing Cloud Revenues
The expanding customer base and the recent contract wins indicate increasing market penetration by IBM. In the last reported quarter, “Strategic Imperatives” revenues grew 12% year over year to $8.3 billion and formed over 40% of total revenues with Cognitive solutions reporting growth of 3.5%.
Cloud revenues surged 30%, but most importantly, the annual run rate for IBM's cloud-based solutions was up $2.2 billion from the year-ago quarter to $6.7 billion.
As per a Jul 2016 IDC report, cloud IT infrastructure spending is expected to increase at a 5-year CAGR of 13.1%, hitting $59.5 billion by 2020. IDC estimates cloud IT infrastructure spending to be 48.7% of total expenditure on enterprise IT infrastructure by 2020. All these spell big opportunity for IBM.
Further, collaborations with the likes of Workday present significant growth opportunity in the long haul. Nevertheless, IBM’s revenues are likely to remain affected in the near term due to intensifying competition in the cloud computing & data analytics arenas.
Zacks Rank & Key Picks
Currently, International Business Machines has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader technology sector include Autobytel Inc. and Stamps.com Inc. . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Interested in IPOs? Check out the special edition of Zacks Friday Finish Line below, where Editor Maddy Johnson and Content Writer Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in 2016 (see part two here).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Get the latest research report on IBM - FREE
Get the latest research report on VZ - FREE