International Business Machines Corp Stock Price, News & Analysis

IBM has completed its acquisition of HashiCorp for $35 per share, representing an enterprise value of $6.4 billion. The acquisition strengthens IBM's hybrid cloud platform capabilities, as HashiCorp specializes in automating and securing infrastructure for hybrid cloud applications and generative AI.

The merger comes at a time when nearly 75% of enterprises are using hybrid cloud, and projections indicate generative AI will drive the creation of 1 billion new cloud-native applications by 2028. HashiCorp's key products, including Terraform and Vault, are now available through IBM's automation software portfolio.

The integration creates synergies across multiple IBM growth areas, including Red Hat, watsonx, data security, IT automation, and Consulting. The combined capabilities aim to help clients accelerate innovation, strengthen security, and optimize cloud infrastructure management at scale.

IBM has unveiled Granite 3.2, the next generation of its large language model family, focusing on small, efficient AI models for enterprise use. The new release includes:

- A vision language model (VLM) for document understanding that matches larger models' performance

- Enhanced reasoning capabilities in 2B and 8B models with switchable chain of thought functionality

- Slimmed-down Guardian safety models with 30% size reduction while maintaining performance

- New TinyTimeMixers (TTM) models for long-term forecasting up to two years

The models are available under Apache 2.0 license on Hugging Face and various platforms including watsonx.ai, Ollama, and Replicate. The Granite 3.2 8B model has shown significant improvements in instruction-following benchmarks and can rival larger models like Claude 3.5 Sonnet in math reasoning tasks.

IBM (NYSE: IBM) has announced its intent to acquire DataStax, an AI and data solution provider, to enhance its watsonx portfolio and accelerate generative AI capabilities. The acquisition, expected to close in Q2 2025, will help enterprises unlock value from unstructured data.

DataStax brings key technologies including AstraDB and DataStax Enterprise (NoSQL and vector database capabilities powered by Apache Cassandra®), and Langflow (open-source tool for low-code AI application development). These solutions will integrate with IBM watsonx.data and watsonx.ai platforms, addressing the challenge that 70% of companies face with data-related difficulties in AI initiatives.

DataStax serves hundreds of customers including FedEx, Capital One, The Home Depot and Verizon. The company, founded in 2010 and headquartered in Santa Clara, CA, will continue supporting open-source communities including Apache Cassandra®, Langflow, Apache Pulsar™, and OpenSearch. Financial terms were not disclosed.

IBM (NYSE: IBM) has announced a new agreement with Riyadh Air to integrate IBM's AI portfolio, watsonx, and IBM Consulting solutions to enhance guest and employee experiences. This collaboration aims to support Riyadh Air's mission to launch flights in 2025, positioning it as the world's first digital native airline. The announcement was made at The FII PRIORITY Miami 2025 Summit.

Riyadh Air will leverage AI to create an intelligent digital foundation, streamlining operations and empowering employees. IBM will oversee the installation and deployment of watsonx, developing AI use cases using the IBM Garage methodology. The AI platform will focus on data security, privacy, regulatory compliance, and responsible AI adoption.

AI-powered Virtual Assistants will be deployed for customer and employee self-service, enhancing efficiency and service. This partnership aligns with Saudi Arabia's Vision 2030, aiming to serve 330 million passengers annually by 2030, positioning the Kingdom as a global aviation hub.

IBM's new global study reveals significant benefits for telecommunication providers embracing cloud computing and AI in their networks. The study, surveying 750 global network executives, highlights that 79% prioritize network performance, while pioneering innovators show higher AI adoption rates compared to peers.

Key findings show that 62% of technology innovators use traditional AI for network planning versus 40% of peers, and 54% integrate generative AI, double their peers' rate. Despite 55% of respondents experiencing network security breaches in the past year, only 42% consider network security a top challenge for the next three years.

Over the next three years, executives plan to increase investments in cloud implementation by 20%, traditional AI by 16%, and generative AI by 19%. The study emphasizes the importance of cultural transformation and innovation for CSPs to capture network monetization opportunities.

IBM has announced a collaboration with Penn State to develop MyResource, an AI-powered student concierge built using watsonx technology. The system, scheduled to launch in fall 2025, will serve nearly 90,000 Penn State students by providing streamlined access to campus resources including academic advising, health and wellness, and financial aid services.

The initiative arose from student leaders identifying needs for improved access to campus services, supported by university analysis. IBM consultants are utilizing watsonx Assistant's conversational AI capabilities and watsonx.ai for hosting and training foundation models with Penn State's data. The system will include AI guardrails to detect and remove potentially harmful language or sensitive data, while watsonx Discovery will enhance response quality and accuracy.

IBM plans to expand this solution to other U.S. higher education institutions in the future.

IBM has released its annual banking outlook report for 2025, highlighting significant shifts in generative AI adoption within the financial services industry. The study reveals that while only 8% of banks were systematically developing generative AI in 2024, with 78% taking a tactical approach, this is expected to change dramatically in 2025.

Key findings show that 60% of banking CEOs acknowledge the need to accept some risk to leverage automation advantages. Over 16% of clients globally are comfortable with fully digital banking relationships, while competition is evolving toward higher-value services, including embedded finance and advisory services for affluent investors and SMEs.

The report analyzes data from eight major markets: the United States, Canada, European Union, United Kingdom, Japan, China, and India, focusing on C-suite leader sentiment, customer behavior, and economic trends.

Telefónica Tech and IBM have announced a collaboration agreement to develop security solutions addressing challenges posed by future quantum computers. The partnership involves integrating IBM's quantum-safe technology into Telefónica Tech's cybersecurity services.

The agreement includes deploying IBM's quantum-safe infrastructure at Telefónica Tech's Madrid headquarters, featuring IBM LinuxONE system, IBM Storage technology, and advanced key protection tools. IBM will provide its Guardium Quantum Safe suite, including Key Lifecycle Manager, Quantum Safe Explorer, and Quantum Safe Remediator, to help organizations manage cryptography and address vulnerabilities.

The collaboration aims to implement new quantum-safe cryptography standards defined by NIST, with IBM having co-developed two of the three published post-quantum cryptography standards. Telefónica Tech will assist organizations in transitioning to new cryptographic standards and establishing a joint use case office focused on communications encryption and critical environment protection.

IBM reported Q4 2024 earnings with revenue of $17.6 billion, up 1% year-over-year. The company's Software segment showed strong performance with 10% revenue growth, while Consulting declined 2% and Infrastructure decreased 8%. Generative AI business reached $5 billion inception-to-date, increasing nearly $2 billion quarter over quarter.

Full-year 2024 revenue was $62.8 billion, up 1%. The company generated $12.7 billion in free cash flow, exceeding expectations. Software revenue grew 8%, while Consulting declined 1% and Infrastructure decreased 4%. Gross profit margin improved to 56.7% GAAP.

Looking ahead to 2025, IBM expects revenue growth of at least 5% at constant currency and projects free cash flow of about $13.5 billion.