Back to top

Image: Bigstock

IBM Focuses on AI Business, Adds New Features to Watson

Read MoreHide Full Article

International Business Machines Corporation (IBM - Free Report) added new functionalities to IBM Watson to enhance Artificial Intelligence (AI)-powered automation offerings and improve results obtained from AI predictions.

The tech giant announced its intent to commercialize IBM Research-developed AI Factsheets in Watson Studio in Cloud Pak for Data all through 2021. AI Factsheets will provide all the information pertaining to AI-based products to help customers get a better understanding of these products.

A Look at New Functionalities

IBM Watson Assistant now features a natural language understanding model for intent classification. The model is built to assist enterprises in deploying in virtual assistants seamlessly. The model is designed to help administrators train AI systems quickly by understanding the intent of the user, while connected to a virtual assistant, stated IBM.


Further, FAQ Extraction (available as beta version) enhances IBM Watson Assistant’s Search Skill. FAQ Extraction automates the process of retrieval of Q&A pairs from FAQ (frequently asked questions) documents. The latest functionality will help businesses populate updated answers in virtual assistants for common queries. This is expected to increase the probability for end users in finding satisfactory answers to their queries, while interacting with chat bots.

IBM stated that it is working on Reading Comprehension feature that is now available in beta version with IBM Watson Discovery. Watson Discovery is IBM’s AI-driven search and text-analytics tool that deploys NLP to generate valuable insights from database, while significantly reducing cost and time associated for such research.

Reading Comprehension feature will aid in identification of more specific answers pertaining to NLP queries from the huge enterprise documents’ database. There will also be a scoring system assigned to the feature that will indicate the confidence for each response generated by the system, added IBM.

Also, IBM extended support for 10 new languages (Hindi, Finnish, Bosnian, Croatian, Danish, Hebrew, Norwegian (Bokmål), Norwegian (Nynorsk), Serbian and Swedish) on IBM Watson Discovery.

Opportunities in AI-powered Automation Market Bode  Well

Robotic process automation (RPA) market is projected to witness a CAGR of 36.4% between 2020 and 2027, per an Allied Market Research Report. The demand for RPA is increasing as companies look to automate repetitive tasks and achieve cut costs and operational efficiency.

IBM’s endeavours to boost its AI-powered automation offerings are likely to help it attract more customers and drive the top line.

To advance its AI automation capabilities, IBM acquired Instana in November 2020 and WDG Automation in July 2020. Prior to that, in May 2020, IBM had unveiled Watson AIOps, which automates the detection of IT malfunctions in real time by using AI technology.

However, the alluring revenue potential attracted many players like Pegasystems (PEGA - Free Report) Automation Anywhere, and Blue Prism, thereby intensifying competition in the space.

Also, weak IT spending triggered by COVID-19 led macroeconomic weakness, might negatively impact demand for IBM’s offerings at least in the near term.

Zacks Rank and Key Picks

Currently, IBM carries a Zacks Rank #4 (Sell).Some better-ranked stocks in the broader sector are Qorvo (QRVO - Free Report) and Avnet (AVT - Free Report) . Both the stocks flaunt a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Qorvo and Avnet is currently pegged at 15.8% and 19%, respectively.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>