IBM Stock Rallies Back Near Record Levels Following Quantum Report, Q3 Earnings Reaction
IBM (IBM) stock jumped Friday on a report about its progress in quantum computing processes aided by chips from Advanced Micro Devices (AMD). The gains pushed IBM past a former buy point and wiped away a loss Thursday that followed the tech giant's third-quarter earnings report.
IBM will soon publish a paper showing it can run a quantum error-correction algorithm on processors from AMD, according to a Reuters report. AMD stock also rallied Friday.
Quantum computers rely on so-called qubits to process information at an exponentially faster rate than traditional computers. But that process can be prone to errors from small environmental disturbances and other factors. A key challenge for quantum-computing is developing system to rapidly identity and correct those errors.
IBM announced in June that it had developed an algorithm to more efficiency correct quantum errors, the Reuters report said. The company will publish a paper next week on IBMs progress using AMD chips, the report said.
IBM Director of Research Jay Gambetta told Reuters that it is a "big deal" to show that the algorithm can operate using a readily available computing chip.
IBM also announced in June that it plans to build a large-scale quantum computing center in Poughkeepsie, N.Y. by 2029.
The company is racing against giants like Amazon (AMZN), Microsoft (MSFT) and Google-parent Alphabet (GOOGL) are racing to build powerful quantum computers. There are also specialized quantum companies like D-Wave Quantum (QBTS) and IonQ (IONQ).
AMD and IBM announced in late August that they would team-up to "develop next-generation computing architectures."
IBM Stock Retakes Buy Point
On the stock market today, IBM stock is more than 7% at 305.57. AMD stock jumped more than 6% to 251.32.
IBM stock closed Thursday down a fraction, recovering from a sell-off earlier in the day that saw shares off by as much as 8%. Investors were digesting third-quarter results that saw IBM beat both top- and bottom-line expectations but posted slower-than-expected growth for its closely-watched Red Hat cloud software business.
Analysts commentary was mostly positive following the late Wednesday report. BofA Securities analyst Wamsi Mohan reiterated a buy rating in a client note Thursday. He said IBM's revenue mix is still shifting "up to higher margin software and driving strong free-cash-flow, and we expect continued positive estimate revisions."
Wedbush analyst Dan Ives wrote that "we would be buyers of any modest knee jerk weakness in the stock." He pointed to IBM's position to "capitalize on the current demand wave for hybrid cloud and AI applications."
With Friday's jump, IBM stock pushed back above a 301.04 cup base buy point. IBM first broke out above that level earlier this month, after announcing a partnership with Anthropic. Shares are on pace to close at a record high, IBM's first since Oct. 7.
For AMD, the gains Friday add to a huge rally that has shares up 55% this month and 107% year-to-date. Gains were helped by major chip deals with Oracle (ORCL) and OpenAI.
YOU MAY ALSO LIKE:
Amazon Stock Nabs Analyst Price-Target Hike: 'Setting Up For Breakout In 2026'
Top Growth Stocks To Buy And Watch
Learn How To Time The Market With IBD's ETF Market Strategy
Find The Best Long-Term Investments With IBD Long-Term Leaders
Meta Stock Ahead Fifth Straight Day Amid AI Job Cuts Report, $27 Billion Data Center Deal
No comments:
Post a Comment