IBM's focus on AI inference technology and high-margin software revenue sets it apart

From Yahoo Finance: 2025-04-06 09:00:00

IBM may not be top of mind for artificial intelligence, but it’s worth watching. While Nvidia dominates the AI data center market, IBM’s software generates over 40% of its revenue. IBM’s hardware sales drive software and consulting revenue, with a potential for growth that could impact the company’s overall success.

IBM’s Z16 and upcoming Z17 platforms are excelling in machine learning inference, a crucial aspect for AI development. Inference models allow platforms to make predictions based on known data, marking a shift in the AI industry. IBM’s technology is poised to capitalize on the growing demand for AI inference servers, positioning the company for success.

While IBM faces challenges in its enterprise infrastructure business, its focus on inference technology sets it apart in the AI hardware industry. The Telum II processors and Spyre accelerators in Z17 servers showcase IBM’s commitment to innovation. As the AI industry evolves, IBM’s capabilities in handling inference tasks position it as a key player in the market.

The potential growth in AI inference server market aligns with IBM’s strengths in this area. With a focus on high-margin software revenue, IBM stands to benefit from the increasing demand for AI technologies. Investors should consider the opportunities presented by IBM’s advancements in AI inference, which could drive significant revenue growth for the company in the future.



Read more at Yahoo Finance: Pay Close Attention to This Crucial Revenue Source for Artificial Intelligence (AI) Giant IBM