ETFs in Focus as IBM Reports Mixed Q3 Results
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 24 2024
0mins
Should l Buy IBM?
Source: NASDAQ.COM
IBM's Q3 2024 Results: IBM reported mixed results for the third quarter of 2024, beating earnings estimates with $2.30 per share but falling short on revenue at $14.97 billion, leading to a decline in its stock price by over 8% in after-hours trading.
Focus on AI and ETFs: The company is expanding its artificial intelligence capabilities, with generative AI bookings reaching $3 billion. Several ETFs heavily invested in IBM, such as First Trust NASDAQ Technology Dividend Index Fund and FT Vest Technology Dividend Target Income ETF, are highlighted due to their significant allocations to the tech giant.
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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: 272.810
Low
210.00
Averages
315.80
High
375.00
Current: 272.810
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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- Strong Performance: Despite facing pressure, Palantir's fourth-quarter revenue increased by 70% year-over-year, with U.S. commercial revenue soaring by 137%, demonstrating robust demand for its AI platforms among enterprise and government clients, while management's guidance exceeded Wall Street expectations.
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- IBM Collaboration Expansion: The company has expanded its collaboration with IBM to deploy enterprise-grade AI at the edge through its SanQtum AI platform, further strengthening its positioning in infrastructure-level AI solutions.
See More
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- Technological Advantage: IonQ's focus on trapped ion systems utilizes tiny lasers to trap ions in vacuum chambers, addressing the size and power consumption issues of traditional quantum computers, enabling operation at room temperature and enhancing market competitiveness.
- Low Error Rates: IonQ's trapped ion qubits exhibit consistency and predictability, achieving gate fidelity levels of up to 99.99%, significantly surpassing industry peers, which enhances computational accuracy and builds customer trust.
- Market Growth Potential: According to Fortune Business Insights, the quantum computing market is projected to grow at a CAGR of 34.8% from 2025 to 2032, positioning IonQ to capitalize on this growth with its innovative technology and product offerings.
- Revenue Expectations: Analysts expect IonQ's annual revenue to nearly triple from 2025 to 2028, reaching $317 million, and although its stock is currently valued at 38 times its projected 2027 sales, there remains substantial room for growth as the market expands.
See More
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- High Fidelity: IonQ's qubits, being identical atoms, demonstrate more consistent behavior than electron-driven superconducting loops, enabling it to achieve gate fidelity levels of up to 99.99% in its two-qubit systems, significantly enhancing computational accuracy.
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- Product Diversity: IonQ currently sells four quantum computing systems, including its flagship Forte system and the upcoming Tempo system, while also offering cloud-based quantum computing services, which enhances its market competitiveness and customer base.
See More
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- Sector Performance: The information technology and consumer discretionary sectors are expected to grow by 33% and 22%, respectively, indicating that these industries will be focal points for investors, particularly through exposure via Vanguard ETFs.
- Vanguard Tech ETF Performance: The Vanguard Information Technology ETF achieved a total return of 776% over the past decade, equivalent to an annual growth of 24%, showcasing its strong performance in the tech sector, despite underperforming during market corrections.
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