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IBM’s Quantum Computing Investments Amidst Investor Skepticism
IBM (NYSE: IBM) is significantly investing in quantum computing as part of its efforts to advance future technologies. On August 26, 2023, IBM announced a collaboration with Advanced Micro Devices (NASDAQ: AMD) to create a quantum supercomputer, contributing to the overall potential of quantum computing in various fields such as AI and cybersecurity.
Despite these advancements, investor interest remains lukewarm. Following the company’s Q2 earnings report on June 30, which showed infrastructure revenue of $4.14 billion surpassing expectations of $3.81 billion, concerns about weaker software sales—$7.39 billion against an anticipated $7.41 billion—have overshadowed its performance. This has led to skepticism regarding whether increased spending on AI infrastructure will detract from overall growth.
IBM’s total “AI book of business” reached $7.5 billion, up 25% from the previous quarter, reflecting ongoing growth in its AI and hybrid cloud segments, particularly through its Red Hat unit, which saw a 16% year-over-year increase in sales. Additionally, IBM’s operating margins improved from 13.7% to 14.5%, indicating a positive trajectory despite current market uncertainties.
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