IBM: A New Path in the AI Era

The current image of International Business Machines (IBM) is fundamentally different from the traditional Big Blue of the past. From a comprehensive technology provider, IBM has transformed into a specialist in software and services with a strong focus on Artificial Intelligence (AI) – just in time for the current AI boom. However, IBM's transformation is far from complete. The company looks back on a long history of AI research. The famous victory of the Big Blue chess computer over human world champion Garry Kasparov in 1997 remains a milestone in AI history, still proudly highlighted on the company's investor page today. Today, IBM continues to lead in AI development, even if the company's application-oriented research doesn't always make big headlines. The Watson AI engine offers data analytics and generative AI services with unique transparency. IBM ensures that Watson's results can be traced back to the original sources, helping customers avoid common pitfalls such as AI misinformation, copyright infringement, and inferior data sources. Additionally, IBM designs its own AI accelerator chips, complementing the use of Nvidia processors. These chips are already being integrated into IBM's Z-system mainframe servers. As an innovator in the field of quantum computing, IBM seeks long-term leadership beyond traditional chip architectures. Although quantum computers are unlikely to be operational within the next five years, this technology represents an important long-term vision. Over more than a decade, these processors could play a central role in the mainframe systems of the future. The company continues its development with a clear focus on growth-promoting technologies. CEO Arvind Krishna emphasized in 2020 that leadership is not a birthright and requires constant reinvention and bold, significant decisions. IBM's current restructuring is already showing positive results. Long-term, this should lead to impressive financial outcomes. However, the last few years have been challenging for long-term investors. Over the past 13 years, the stock price has increased by only 28%, lagging far behind the S&P 500's rise of 371%. Nevertheless, IBM was able to increase its free cash flows by 61% and remains a valuable bet on the expanding AI market. For new investors, there is an attractive entry point. The stock is currently traded with a 3.3% dividend yield and offers long-term potential. Patience pays off on Wall Street, and for IBM investors, now seems to be the perfect time to invest.