International Commercial Machinery Society IBM recently signed an agreement with Siam Commercial Bank for an undisclosed sum to increase the security of countless digital transactions on its platform and provide improved service to its customers. The collaboration aims to leverage key IBM expertise in delivering a secure and resilient enterprise platform for mission-critical applications and data across hybrid multi-cloud to mitigate risk and minimize business fraudulent financial transactions.
Under the agreement, all of the Thailand-based bank’s banking and finance applications that support massive customer data and online transactions will be performed through IBM zSystems – a family name the company uses for all of its z mainframes. /Architecture. Data managed by IBM zSystems (“Z” stands for “zero downtime”, reflecting system reliability) is encrypted by dedicated crypto processors across the ecosystem and encryption keys are managed with the most secure hardware security module in the industry, making it highly secure.
Additionally, Siam Commercial Bank adopted IBM z/OS Connect to enable RESTFul APIs (application programming interfaces) in its core banking applications on IBM zSystems. This, in turn, will help unlock the value of IBM Z subsystems and build consumable APIs in minutes to put Z applications and data at the heart of the hybrid cloud strategy. It will increase scalability, accelerate response time and simplify integration of its core IT infrastructure for high security, performance and agility of application development for innovative, customer-centric and personalized products and services.
IBM expects its growth to be driven primarily by analytics, cloud computing and security services. A better business mix, improved operating leverage through productivity gains and increased investment in growth opportunities will likely increase its profitability.
However, the ongoing and time-consuming transition of IBM’s business model to the cloud is likely to be a headwind in the near term. Although the public cloud market is expected to be one of the fastest growing IT categories with a CAGR of around 25-30% over the next five years, IBM is unlikely to keep pace with its competitors. The high integration risks associated with ongoing acquisitions pose significant challenges. In addition, the weakness of its traditional business and the volatility of exchange rates remain important concerns. Moreover, higher profits on lower revenues indicate that the company has cut costs to maintain profits. We believe that the scope for further cost reductions is limited. Therefore, if costs are further reduced, there could be a negative impact on product quality. It could also lead to a further delay in product launches, reducing its long-term growth potential to some extent.
The stock has lost 4.7% over the past year compared to industrydown 11.2%. We are impressed with the growth potential inherent in this Zacks Rank #3 (Hold) title.
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Clearfield, Inc. CLFD, sporting a Zacks Rank #1 (Strong Buy), is a solid choice for investors in the broader industry. You can see the full list of today’s Zacks #1 Rank stocks here.
Clearfield has posted a surprise profit of 37.5%, on average, over the past four quarters. Current-year earnings estimates for the stock are up 114.7% since June 2021. Over the past year, Clearfield has gained a solid 62.4%.
InterDigital, Inc. IDCC also sports a Zacks No. 1 rank. It has a long-term earnings growth expectation of 15% and has delivered an excellent earnings surprise of 141.1%, on average, over the past four quarters. Profit estimates for the current year have increased by 69.1% since June 2021.
InterDigital is focused on pursuing deals with license-free customers in the handset and consumer electronics markets. The company aims to become a leading designer and developer of technology and innovation solutions for the mobile industry, IoT and related technology fields. InterDigital’s global footprint, diverse product portfolio and ability to penetrate different markets is impressive.
Sierra Wireless, Inc. SWIR wears a Zacks Rank #2 (Buy). It has a long-term earnings growth expectation of 15% and has generated an earnings surprise of 223.7%, on average, over the past four quarters.
Over the past year, Sierra Wireless has gained 48.6%. Current-year earnings estimates for the stock are up 616.7% since June 2021. The company continues to launch innovative products for mission-critical operations that require high security and optimal 5G performance.
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