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International Business Machines (IBM) Stock Tumbles 22% as Citi Analyst Sets $285 Price Target

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IBM Stock Card

Key Takeaways

  • International Business Machines shares have plummeted nearly 22% in 2026, marking the company’s steepest year-opening decline since 2002.
  • Citi Research’s Fatima Boolani launched coverage with a Buy recommendation and set a $285 price objective.
  • The company reached a $17 million settlement agreement with the Department of Justice regarding diversity program allegations.
  • This DOJ resolution represents the inaugural case from its “Civil Rights Fraud Initiative,” established in the prior year.
  • The tech giant’s quantum computing strategy targets delivery of its most advanced system in 2029.

Shares of International Business Machines have experienced a brutal 2026, plunging nearly 22% since January 1st. This performance represents the company’s most challenging year opening since 2002, when the stock tumbled 26% during the identical timeframe. The decline reflects a widespread software sector selloff that has pressured technology stocks universally.


IBM Stock Card
International Business Machines Corporation, IBM

Yet the downturn hasn’t deterred Citi Research’s Fatima Boolani from taking a contrarian stance. This past Friday, she launched coverage on the tech veteran with a Buy recommendation and established a $285 price objective — suggesting approximately 23% appreciation potential from present valuations. Shares were changing hands at $231.25 during that session, declining 2.5% intraday.

Boolani’s investment thesis revolves around IBM’s demonstrated capacity for enduring — and transforming through — transformative technology cycles. From tabulating machines through desktop computing to information technology consulting, the corporation has completely restructured its business model multiple times. This legacy, she contends, demonstrates an “uncanny ability” to maintain market relevance throughout successive technological disruptions.

Enterprise Loyalty and Artificial Intelligence Strategy

This resilience manifests clearly in the company’s client retention patterns. Evercore ISI’s Amit Daryanani highlighted a comparable observation during the previous month, emphasizing that IBM’s enterprise customers have maintained their relationships despite numerous opportunities to transition away from legacy mainframe platforms. This retention characteristic proves difficult to quantify — yet carries substantial weight.

Currently, the company’s product ecosystem encompasses database platforms, development frameworks, and hybrid computing architectures. Boolani views this positioning as an optimal substrate for artificial intelligence implementation, maintaining that enterprise-grade AI solutions will necessarily integrate with established IT infrastructure — precisely IBM’s operational territory.

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She additionally dismissed concerns that AI-first startups could displace established enterprise software providers like International Business Machines. The corporation’s extensive consulting partnerships with Fortune 500 organizations provide “competitive insulation,” according to her analysis. Furthermore, those emerging AI vendors might leverage IBM as a gateway for enterprise market penetration.

The company’s capital expenditure requirements remain below cloud hyperscale competitors, which Boolani argues warrants a more favorable free cash flow valuation multiple. She characterized the stock’s underperformance relative to the broader megacap technology cohort as “punitive,” particularly considering the margin expansion she anticipates.

$17 Million Diversity Program Resolution

As Wall Street analysts constructed their bullish arguments, the company simultaneously concluded a regulatory matter with federal authorities. International Business Machines agreed to remit $17 million to resolve a Department of Justice investigation examining its diversity, equity and inclusion initiatives.

This resolution marks the inaugural settlement stemming from the DOJ’s “Civil Rights Fraud Initiative,” a division created last year to scrutinize DEI programs through civil anti-fraud legislation. Federal prosecutors claimed the company employed a “diversity modifier” that connected executive compensation to achieving demographic benchmarks.

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The tech company rejected any wrongdoing allegations. The settlement document explicitly clarifies that it constitutes “neither an admission of liability by IBM nor a concession by the United States that its claims are not well-founded.”

Company representatives confirmed they have already discontinued or restructured the programs under examination.

Regarding longer-term strategic initiatives, the corporation’s quantum computing development roadmap continues generating investor interest. Management remains committed to launching its most sophisticated quantum platform in 2029. Boolani characterized this capability as an “important call option” for growth-oriented investors, observing that the company’s established government sector relationships provide a robust foundation in this emerging technology domain.

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Meta builds photorealistic AI Zuckerberg to engage employees in real time

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Meta builds photorealistic AI Zuckerberg to engage employees in real time

Meta Platforms is experimenting with AI to develop a new way for its chief executive, Mark Zuckerberg, to communicate with his staff without being physically present.

Summary

  • Meta Platforms is developing a photorealistic AI-powered 3D version of Mark Zuckerberg to enable real-time interaction with employees without physical presence.
  • The system is being trained on Zuckerberg’s voice, expressions, and communication style, with the goal of providing staff direct access to leadership for guidance and updates.
  • The initiative comes as Meta expands its social commerce tools, allowing creators to link product catalogues within Reels, turning content into shoppable storefronts across 22 countries.

A recent report by the Financial Times says the company is building a photorealistic, AI-powered 3D version of Zuckerberg, which would be capable of engaging with his employees in real time.

The system will be designed to simulate natural conversations, allowing staff members to interact with the digital representation of Zuckerberg, who can respond in a human-like manner.

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While still in early stages, the initiative signals Meta’s continued investment in virtual human systems that can speak, respond, and hold conversations across different environments.

The digital version is being trained using Zuckerberg’s voice, facial expressions, tone, and public speaking patterns. It is also learning from his recent statements on company strategy, so it can deliver responses aligned with his views. Reports indicate that Zuckerberg is actively involved in testing and refining the system.

Meta expects the tool to give employees real-time access to leadership for guidance, feedback, and updates. The company also sees it as a way to improve internal communication, especially given its global workforce, where direct interaction with executives is limited.

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However, it should be noted that creating such a system requires massive computing power to ensure lifelike visuals and low-latency conversations. Teams at Meta have been working to improve both rendering quality and voice realism. As part of this effort, the company has strengthened its capabilities through acquisitions such as PlayAI and WaveForms.

The project is separate from Meta’s internal CEO assistant agent, which helps Zuckerberg manage daily tasks and retrieve information. Unlike that system, the 3D model is focused on communication and interaction, and could eventually extend beyond internal use.

Once successful, the approach may open the door for creators and influencers to build their own AI-driven avatars to engage audiences. Meta has already taken initial steps in this direction through its AI Studio platform.

Meta pushes into social commerce to strengthen creator ecosystem

The development follows Meta Platforms’ expansion in social commerce by linking creators, artificial intelligence, and advertising more closely to purchasing activity across platforms like Instagram and Reels.

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A central part of the strategy involves increasing the role of creators in the shopping journey. Businesses in 22 countries, including India, will soon be able to share product catalogues directly with creators. These can then be tagged and linked within Reels, effectively turning content into shoppable storefronts.

The update would narrow the gap between entertainment and commerce, allowing users to move more seamlessly from discovery to purchase within the same interface.

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Crypto ETP Inflows Hit $1.1 Billion, Strongest Since January

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Crypto ETP Inflows Hit $1.1 Billion, Strongest Since January

Cryptocurrency investment products clocked significant inflows last week, marking their strongest weekly gains since January.

Global crypto exchange-traded products (ETPs) logged $1.1 billion in inflows last week, with Bitcoin (BTC) leading the gains with $871 million in inflows, CoinShares reported on Monday.

The inflows marked the second-biggest weekly gains in 2026 so far, following only the $2.17 billion in weekly inflows recorded in mid-January.

Weekly crypto ETP flows (in millions of US dollars). Source: CoinShares

CoinShares’ head of research, James Butterfill, attributed the spike in inflows to a rebound in investor risk appetite following tentative ceasefire developments in Iran, alongside support from softer-than-expected US inflation and spending data.

The inflows came amid volatility in spot markets, with BTC reclaiming $70,000 and briefly topping $73,000 last week, even as broader market sentiment remained negative, underscoring sustained institutional demand and resilience in regulated investment products.

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Ether ETP flows rebound, but year-to-date inflows are still negative

Ether (ETH) ETPs saw a strong rebound in sentiment with around $196.5 million in inflows, the first inflows after three consecutive weeks of outflows.

Despite the gains, Ether remains one of the only assets in a net outflow position year-to-date, at $130 million. In contrast, Bitcoin sits on the largest inflows this year so far at $1.9 billion and accounts for around 83% of the $2.3 billion in total crypto ETP inflows year-to-date.

Crypto ETP flows by asset (in millions of US dollars). Source: CoinShares

Although Bitcoin ETPs posted significant inflows, short-Bitcoin investors were also active last week, with weekly inflows totaling $20 million, their largest weekly inflows since November 2024, Butterfill noted.

Among other gains, XRP (XRP) ETPs posted inflows of around $19 million. Solana (SOL) saw minor outflows of $2.5 million.

Related: BlackRock Bitcoin ETF sees $269M inflows, best day since early March

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Regionally, positive sentiment was almost entirely concentrated in the US, which saw inflows of $1 billion, accounting for 95% of net weekly inflows. The majority of Bitcoin ETP inflows were driven by US spot BTC exchange-traded funds, which posted $786.3 million in inflows last week, according to SoSoValue data.

Germany recorded inflows of $34.6 million, while Canada and Switzerland saw more modest inflows of $7.8 million and $6.9 million, respectively.

Magazine: Your guide to surviving this mini-crypto winter