IBM Expands watsonx Capabilities: Will This Boost Customer Growth?

International Business Machines Corporation IBM recently announced that it has entered into a partnership with Groq, which specializes in fast and affordable inference infrastructure that efficiently powers AI models. Groq’s Language Processing Units (LPUs), trusted by millions of clients worldwide, can deliver over five times faster and more cost-efficient inference compared to legacy GPU systems. In the current partnership, IBM is set to integrate Groq's inference technology, GroqCloud, on watsonx Orchestrate.

This will allow IBM watsonx clients to tap into high-speed and high-performance inference, which will allow users to capitalize on the complete potential of AI models and accelerate agentic AI deployment. The solution will ensure compliance with strict regulatory and security requirements. It will offer flexibility to purpose-built agentic AI for diverse applications. The expanded capabilities are expected to support several use cases such as customer care, employee support and productivity enhancement.

IBM also aims to integrate Groq LPU architecture into its Red Hat open source vLLM technology and also enhance IBM Granite models. The collaboration aims to address critical challenges related to speed, cost and reliability of AI agent adoption in major sectors like healthcare, finance, government, retail and manufacturing.

Per a Mordor Intelligence report, the Agentic AI market is expected to witness a 43.61% compound annual growth rate between 2025 and 2030. IBM, with its AI technology platform watsonx, intends to capitalize on this market trend.

Other Tech Firms Focusing on Agentic AI Deployment

ServiceNow NOW is extensively investing in integrating AI and machine learning capabilities across its product suite. The company recently introduced AI experience, which includes AI Voice Agents, AI Web Agents, AI Data Explorer and AI Lens. These advancements have significantly bolstered ServiceNow’s AI platform and boosted commercial prospects. ServiceNow AI platform gives clients the freedom to choose from its large language models or use models from third-party providers. Its extensive partner base includes Microsoft, Amazon and Snowflake.

Microsoft Corporation MSFT is placing strong emphasis on AI infrastructure development. The company has introduced  Azure AI Foundry, a comprehensive platform engineered to design and manage AI applications and agents. Microsoft agent services gained significant momentum with 14,000 customers creating automated solutions. It has also launched leading-edge features, including group-level agents in Teams for real-time translation and meeting facilitation. Microsoft clients have created 3 million custom agents utilizing SharePoint and Copilot Studio.

IBM’s Price Performance, Valuation and Estimates

IBM stock has surged 23% over the past year compared with the industry’s growth of 48.6%.

Going by the price/earnings ratio, IBM’s shares currently trade at 23.92 forward earnings, above 23.84.

The Zacks Consensus Estimate for IBM’s earnings for 2025 has risen over the past 30 days.

IBM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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