IBM (IBM) Stock Is Up, What You Need To Know

What Happened?

Shares of technology and consulting giant IBM (NYSE:IBM) jumped 3.3% in the morning session after it announced a partnership with artificial intelligence firm Anthropic to integrate Anthropic's AI models into its software. 

The collaboration aimed to boost productivity for business customers by embedding Anthropic's Claude family of large language models (LLMs) into IBM's software portfolio. The first integration was planned for a new development tool for software engineers. IBM reported that in early testing, more than 6,000 internal users experienced average productivity gains of 45%. This partnership was seen as a significant step to strengthen IBM's position in the expanding enterprise AI market, complementing the existing demand for its WatsonX platform.

After the initial pop the shares cooled down to $298.60, up 3.2% from previous close.

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What Is The Market Telling Us

IBM’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 12 days ago when the stock gained 5.6% on the news that the company, in partnership with HSBC, announced the world's first-known successful trial of quantum-enabled algorithmic trading. 

This collaboration showed that using IBM's quantum systems improved the prediction of bond trade outcomes by up to 34% compared to traditional computing methods. The trial focused on the European corporate bond market, where the technology helped to better price customer inquiries in a competitive bidding process. This milestone represented a significant development in finding practical uses for quantum computers to solve real-world financial problems. The news positioned IBM at the forefront of applying this advanced technology in the financial services industry. In separate news, IBM Japan also revealed a team-up with Fujitsu to advance innovation in AI and healthcare.

IBM is up 35.8% since the beginning of the year, and at $298.60 per share, has set a new 52-week high. Investors who bought $1,000 worth of IBM’s shares 5 years ago would now be looking at an investment worth $2,407.

Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.