Artificial Intelligence Can do Work Faster and Cheaper

IBM is the world's ninth-largest information technology company by revenue. Over the last 52 weeks IBM has an average stock price of $147.17. The 52-week average selling price is the sum of the stock's average closing prices from each trading day during the 52-week period over the number of trading days in that 52-week period. This average is more stable and more meaningful to investors because it smooths out IBM stock daily price fluctuations and is a better metric to highlight the direction of the stock's price over time. The graph below shows how, on Nov 27, 2017, IBM stock sold for $151.98 per share and how, on Nov 26, 2018, sold for $119.56. This is a drop of 21.3% over the last year.

The next graphic shows how IBM is now 30% below the 52 week high ($171.13) and 5% above the 52 week low ($114.09). The graphic also compares IBM to its closest competitors: Apple, Hewlett Packard Inc., Hewlett Packard Enterprise Company, and Dell Technologies. This means that IBM is performing worse than those closest companies on the stock market. The pink line on the graph on the bottom of the next page shows how, over the last 52 weeks, IBM has recently dropped verses these competitors. According to research, IBM reported third-quarter results that fell short of analysts’ estimates. In addition, revenue in IBM’s Technology Services and Cloud Platforms declined during the quarter. These are important areas that IBM should be doing better verses its closest competitors. IBM has 2019 Price to Earnings (P/E) ratio of 9.3. This P/E ratio has been mostly between 8 and 13 since 2015. This can indicate that IBM stockholders don’t see very good prospects for growth over the next few years.

Apple has just come out with its new iPhones and many people feel that Apple’s products and services are more modern and exciting. IBM has been working on a transition away from its more traditional products and it seems that most people in the market feel that Apple has a competitive advantage. I know that I have an iPhone and a lot of people do more and more on their phone.

However, IBM really is in a pretty good financial position and many large companies still rely on its servers and middleware. Most people are aware that IBM Watson beat humans on Jeopardy. This means that the future may be bright as companies put resources into figuring out how to incorporate Artificial Intelligence into how their companies can streamline their processes and make them faster and cheaper with the use of computers. Smart computers can help replace humans with simple tasks and can improve the way companies can process information.  

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