Meta's social media concentration seems limited compared to Alphabet's wider capabilities. Alphabet trades at 25 times earnings or 6 times sales. Facebook's valuation ratios are 33 and 9. A weaker company costs more, in my opinion. Alphabet is a flexible tech company suited for long-term success, but Meta may not be. Therefore, Alphabet's stock is a better purchase now.
Big Blue's enterprise-focused AI strategy hinges on shifting consumer preferences. Century-old tech giant IBM doesn't play that game. Instead, it targets business-class customers with big infrastructure budgets and goals.
Watsonx AI is secretly gaining long-term contracts. Big Blue's selected customers will deploy AI tools in production-ready goods, services, and processes, leaving no space for error. Each new technology must pass technical assessments for security, data quality, actionable outcomes, and cost-effectiveness.
Only then will the prospective client's IT director present a multi-year IBM deal to senior management for approval. These deals involve an enormous amount of John Hancocks and long-term commitments that are tougher to replace.
IBM may appear to have lagged behind in the battle to generative AI domination, but this is far from the reality. It's slower in this target market, so don't announce your long-term IT ambitions before the new systems are tested. Behind locked doors, Big Blue is establishing a massive AI presence. As unfilled AI orders accumulate from multi-year contracts, the evidence is emerging.
"Last quarter, I shared with you that our book of business in the third quarter specifically related to generative AI and Watsonx was in the low hundreds of millions," IBM CEO Arvind Krishna said in January's fourth-quarter results call. Demand has increased since then, and our fourth-quarter book of business is treble the third-quarter amount. Thousands of hands-on client engagements continue, including an acceleration in pilots completed during the quarter."
So, order volume doubles from quarter to quarter, and IBM is aggressively pursuing more AI deals.
IBM's AI investment is sustainable due to its stable, high-value clientele. By comparison, Meta's bet on an unclear metaverse future seems reckless. IBM stock is cheap at 24 times earnings and just 3 times revenue. Compared to Meta's higher value, Big Blue offers a favorable entry point into a company with a history of adapting to new technology.
stay turned for development