International Office Machinery Company IBM recently expanded the generative AI capabilities of its managed threat detection and response services with the launch of the IBM Consulting Cybersecurity Assistant.
Designed to accelerate and improve the identification, investigation and response to critical security threats, the Cybersecurity Assistant will be an integral part of IBM’s Watsonx data and AI platform, as well as IBM Consulting Advantage. This is expected to enable IBM consultants to more proactively and accurately respond to critical cyber threats with consistency, repeatability, quality and agility.
Improved threat mitigation
The Cybersecurity Assistant features a generative AI conversational engine with real-time insights and operational task assistance for IBM clients and security analysts. Using IBM’s broader generative AI capabilities that build on the company’s Granite core models and watsonx.ai platform, it can continuously learn from investigations, leading to faster response and accuracy over time.
Leveraging historical correlation analysis of similar threats, the Cybersecurity Assistant will aim to provide a holistic and integrative approach to threat management to help security analysts better understand critical threats. Additionally, it will reduce manual investigations and operational tasks through automatically recommended actions based on analyzed historical activity patterns and predefined confidence levels. This, in turn, will help effectively mitigate multidimensional cyber threats that have become commonplace over time.
Betting big on AI solutions
In March, IBM took a major step forward in enterprise AI innovation by integrating the open-source Mixtral-8x7B language model into its watsonx AI and data platform. Built on innovative Sparse modeling and Mixture-of-Experts, the model excels at rapid data processing and contextual analysis. Its ability to efficiently handle large data sets makes it a valuable asset for businesses looking for actionable insights.
IBM’s Watsonx platform is expected to be the foundational technology platform for its AI capabilities. Watsonx delivers the value of foundational models to the enterprise, enabling it to be more productive. This ready-to-use AI and data platform includes three products to help organizations accelerate and scale AI: the watsonx.ai studio for new foundational models, generative AI, and machine learning; the watsonx.data fit-for-purpose data store, built on an open lake house architecture; and the watsonx.governance toolkit to enable the creation of AI workflows with accountability and transparency.
Competitive pressure remains a brake
Despite strong traction from hybrid cloud and AI, IBM faces fierce competition from Amazon.com, Inc.Amazon Web Services and Microsoft CorporationIncreasing pricing pressure is eroding margins, and profitability has generally trended downward over the years, with the exception of occasional spikes. The company’s ongoing and time-consuming transition of its business model to the cloud is a challenging task. The weakness of its traditional business and currency volatility remain significant concerns.
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IBM Outperforms Its Subsectors
Over the past year, IBM has gained 34.5% compared to the industry’s growth of 18.9%, outperforming its peers.
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Key evaluation indicator
From a valuation perspective, IBM appears to be trading at a premium to the industry and is trading well above its average. Based on the price-to-earnings ratio, the company’s shares are currently trading at 18.69 forward earnings, which is higher than the industry’s 17.14 and the stock’s average of 12.64.
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Endnote
IBM plans to capitalize on the growing trend among enterprises to adopt an interoperable, cloud-agnostic approach to secure multicloud management, with a focus on hybrid cloud and generative AI solutions. Better business mix, improved operating leverage through productivity gains and increased investment in growth opportunities are key growth drivers.
However, with a Zacks Rank #3 (Hold), IBM appears to be in the middle of the road, and new investors could be better off if they trade with caution. The stock is also trading at premium valuation levels, and investors could be waiting for a better entry point to take advantage of its long-term fundamentals. Therefore, it may not be prudent to bet on the stock at the moment. You can see that the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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