Aramco and IBM Plan Collaboration to Advance AI
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy IBM?
Aramco and IBM announced their intended collaboration on opportunities to advance artificial intelligence, agentic AI, automation, material science and other mutually agreed domains in the industrial sector. The collaboration builds on a longstanding relationship and strong alignment around innovation, operational excellence, and solving complex, large-scale challenges, they said in a statement. The planned collaboration is subject to the parties reaching definitive agreements.
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Analyst Views on IBM
Wall Street analysts forecast IBM stock price to rise
16 Analyst Rating
11 Buy
4 Hold
1 Sell
Moderate Buy
Current: 225.740
Low
210.00
Averages
315.80
High
375.00
Current: 225.740
Low
210.00
Averages
315.80
High
375.00
About IBM
International Business Machines Corporation is a provider of global hybrid cloud and artificial intelligence (AI) and consulting expertise. The Company’s segments include Software, Consulting, Infrastructure and Financing. The Software segment includes hybrid cloud and AI platforms, which allow clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment focuses on integrating skills on strategy, experience, technology and operations by domain and industry. The Infrastructure segment is focused on the hybrid cloud infrastructure market, providing on-premises and cloud-based server and storage solutions. In addition, it offers a portfolio of life-cycle services for hybrid cloud infrastructure deployment. The Financing segment provides client and commercial financing, facilitating its clients’ acquisition of hardware, software and services. It helps clients in more than 175 countries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Positioning: Analysts believe that IBM is carving out a more defensible role in enterprise AI by leveraging its strengths in hybrid infrastructure, data gravity, and trusted deployment, although execution and competitive dynamics remain areas to watch.
- Product Innovation: The ongoing development of watsonx as an orchestration layer for AI agents, combined with differentiated capabilities like real-time mainframe integration and GPU-accelerated analytics, could enable IBM to capture higher-value software and platform spending in regulated industries.
- Operational Efficiency: The focus on operationalizing AI for both internal use and clients supports IBM's long-term productivity narrative, as increased automation, orchestration, and real-time data access are expected to drive efficiency gains across consulting and software delivery.
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- Stock Price Decline: The company's shares fell over 12% in early trading, reflecting market concerns about its future profitability and potentially undermining investor confidence.
- Restructuring Low-Margin Contracts: Kyndryl is restructuring low- or no-margin contracts inherited from IBM to improve profitability; while this may lead to short-term job losses, it is aimed at enhancing long-term financial health.
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See More
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- Long-term Relationship: Since 1947, IBM has built a long-term partnership with Aramco that has traversed multiple technology waves, with a shared focus on innovation, investment, and delivering large-scale impact, highlighting their mutual commitment to technological advancement.
- Exploring Technology Applications: The collaboration will explore applications of AI, hybrid cloud, and advanced technologies across industrial and energy sectors, particularly in mission-critical environments, aiming to leverage complementary strengths to unlock greater value and roll out innovation at scale.
- Market Sentiment Shift: Despite the announcement of this partnership, retail sentiment around IBM's stock has shifted from neutral to bearish, with shares declining over 21% year-to-date, indicating market concerns regarding the company's future prospects.
See More
