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Can IBM's Extended ServiceNow Deal Accelerate Enterprise AI Adoption?
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Key Takeaways
IBM and ServiceNow expanded their alliance to help businesses deploy AI at scale across enterprise systems.
IBM's deal targets fragmented data and legacy technology that limit flexibility, efficiency and AI adoption.
IBM's AI push also includes Google Cloud and Red Hat partnerships to improve infrastructure and security.
International Business Machines Corporation (IBM - Free Report) has strengthened its partnership with ServiceNow, Inc. (NOW - Free Report) through a long-term strategic collaboration to help businesses overcome fragmented data across enterprise systems and outdated legacy technology, the two major barriers to artificial Intelligence (AI) adoption. The deal enables IBM to provide customers with an open, secure and flexible platform for large-scale AI usage.
Per the agreement, IBM will combine its advanced AI, automation and data management capabilities with ServiceNow’s AI platform to help enterprises deploy AI at scale. It helps organizations modernize existing systems, reduce costs and complexity, and address the challenges of outdated infrastructure that limits flexibility and efficiency.
Application modernization, enterprise data governance and autonomous infrastructure operations are the three key areas the alliance will focus on. It aims to help businesses upgrade legacy applications for AI integration, improve data quality and management to keep enterprise data AI-ready, and enhance IT operations through automation that enables the detection and resolution of issues before they impact business operations.
IBM recently expanded its AI efforts through partnerships with Google Cloud to improve AI infrastructure and security. The collaborations reinforce the company’s growing presence in the enterprise AI market.
How Are Competitors Advancing?
IBM faces competition from Microsoft Corporation (MSFT - Free Report) and Amazon.com, Inc. (AMZN - Free Report) . Microsoft has expanded its AI efforts by launching new AI tools to help businesses automate complex tasks. The company is improving Windows with more built-in AI features to enhance speed, privacy and efficiency. Microsoft continues to strengthen its Copilot and cloud AI services to support enterprise AI adoption.
Amazon is investing in AI chips to reduce dependence on third-party processors and strengthen its cloud capabilities. The company is integrating more AI-powered features into Alexa to deliver smarter and more personalized interactions. Amazon is using AI in its logistics network to improve inventory management, delivery speed and operational efficiency.
IBM’s Price Performance, Valuation & Estimates
IBM shares have lost 3.4% over the past year against the industry’s growth of 234.7%.
Image Source: Zacks Investment Research
From a valuation standpoint, IBM trades at a forward price-to-sales ratio of 3.51, below the industry average of 6.7.
Image Source: Zacks Investment Research
Earnings estimates for 2026 have declined 0.2% to $12.38 over the past 60 days, while the same for 2027 have increased 0.8% at $13.42.
View the Zacks #1 Rank List
Image: Bigstock
Can IBM's Extended ServiceNow Deal Accelerate Enterprise AI Adoption?
Key Takeaways
International Business Machines Corporation (IBM - Free Report) has strengthened its partnership with ServiceNow, Inc. (NOW - Free Report) through a long-term strategic collaboration to help businesses overcome fragmented data across enterprise systems and outdated legacy technology, the two major barriers to artificial Intelligence (AI) adoption. The deal enables IBM to provide customers with an open, secure and flexible platform for large-scale AI usage.
Per the agreement, IBM will combine its advanced AI, automation and data management capabilities with ServiceNow’s AI platform to help enterprises deploy AI at scale. It helps organizations modernize existing systems, reduce costs and complexity, and address the challenges of outdated infrastructure that limits flexibility and efficiency.
Application modernization, enterprise data governance and autonomous infrastructure operations are the three key areas the alliance will focus on. It aims to help businesses upgrade legacy applications for AI integration, improve data quality and management to keep enterprise data AI-ready, and enhance IT operations through automation that enables the detection and resolution of issues before they impact business operations.
IBM recently expanded its AI efforts through partnerships with Google Cloud to improve AI infrastructure and security. The collaborations reinforce the company’s growing presence in the enterprise AI market.
How Are Competitors Advancing?
IBM faces competition from Microsoft Corporation (MSFT - Free Report) and Amazon.com, Inc. (AMZN - Free Report) . Microsoft has expanded its AI efforts by launching new AI tools to help businesses automate complex tasks. The company is improving Windows with more built-in AI features to enhance speed, privacy and efficiency. Microsoft continues to strengthen its Copilot and cloud AI services to support enterprise AI adoption.
Amazon is investing in AI chips to reduce dependence on third-party processors and strengthen its cloud capabilities. The company is integrating more AI-powered features into Alexa to deliver smarter and more personalized interactions. Amazon is using AI in its logistics network to improve inventory management, delivery speed and operational efficiency.
IBM’s Price Performance, Valuation & Estimates
IBM shares have lost 3.4% over the past year against the industry’s growth of 234.7%.
Image Source: Zacks Investment Research
From a valuation standpoint, IBM trades at a forward price-to-sales ratio of 3.51, below the industry average of 6.7.
Image Source: Zacks Investment Research
Earnings estimates for 2026 have declined 0.2% to $12.38 over the past 60 days, while the same for 2027 have increased 0.8% at $13.42.
Image Source: Zacks Investment Research
IBM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.