IBM has acquired Cognitus to bolster its AI capabilities and SAP solutions for regulated industries. The stock has surged over 40% this year. The acquisition aligns with IBM’s shift towards AI and cloud services. Cognitus’ AI tools cater to customers in regulated industries, enhancing IBM’s offerings.

Cognitus strengthens IBM’s AI offerings by providing tools for compliance monitoring and SAP implementations. IBM’s software division saw a 10% sales increase in Q3 to $7.2 billion. Cognitus also contributes to IBM’s consulting arm, generating $5.3 billion in Q3 revenue. The acquisition complements IBM’s pending acquisition of Confluent, enhancing its data capabilities.

IBM is enhancing its AI arsenal with the acquisition of Cognitus and a partnership with Anthropic. The tech giant’s stock valuation remains high compared to rivals like Microsoft and Alphabet. While IBM has strong factors and a solid dividend yield, it may be wise to wait for a drop in stock price before investing.

The Motley Fool identifies 10 top stocks to buy, excluding IBM. Their recommendations have produced significant returns in the past. Consider joining Stock Advisor for more insights. Analyst Robert Izquierdo holds positions in IBM, which is recommended by The Motley Fool along with Confluent and SAP.

Read more at Yahoo Finance: Could the Cognitus Acquisition Be IBM’s Most Significant AI Move in Years?