Will IBM's (IBM) AMD-Powered Cloud Collaboration Redefine Its Role in Generative AI Infrastructure?

• On October 1, 2025, AMD and IBM announced a multi-year collaboration to deliver a large-scale cluster of AMD Instinct™ MI300X GPUs on IBM Cloud for Zyphra, a San Francisco-based open-source AI research company, enabling Zyphra to train advanced multimodal foundation models for its Maia superagent platform.
• This marks the first major deployment of AMD’s AI hardware stack on IBM Cloud, positioning IBM as a key provider of infrastructure for cutting-edge generative AI research and demonstrating its expanding role in supporting high-growth AI startups.
• We'll examine how IBM's expanded partnership with AMD to power generative AI workloads across cloud platforms may influence its growth narrative.

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International Business Machines Investment Narrative Recap

Investors in IBM are often betting on the company's strategy of combining hybrid cloud, AI, and innovative infrastructure to drive long-term value, backed by reliable dividend payments and a broad base of enterprise customers. The recent collaboration with AMD to deliver advanced AI capabilities for Zyphra underscores IBM's push into leading-edge AI infrastructure, which could reinforce its growth narrative by aligning with major enterprise demand for generative AI solutions. At the same time, competitive pressures in cloud and consulting remain the most important short-term risk, this partnership, while symbolically important, may not materially change those underlying challenges right away.

In the context of this news, IBM's recent resource commitment to support Datavault AI's platform stands out. Both announcements reflect IBM's pursuit of partnerships in high-growth AI markets, expanding its technological capabilities and relevance as clients accelerate adoption of AI in enterprise workflows. These efforts reinforce current catalysts around hybrid cloud and AI offerings, strengthening IBM's positioning but not erasing sector-wide risks associated with rapid industry change.

However, investors should also watch out for a different kind of risk, despite recent headlines, IBM’s legacy businesses still face possible long-term declines as cloud-native competitors gain share...

Read the full narrative on International Business Machines (it's free!)

International Business Machines' narrative projects $74.4 billion revenue and $10.5 billion earnings by 2028. This requires 5.1% yearly revenue growth and a $4.6 billion earnings increase from $5.9 billion today.

Uncover how International Business Machines' forecasts yield a $281.32 fair value, in line with its current price.

Exploring Other Perspectives

The most pessimistic analysts see IBM's revenue reaching just US$73.3 billion in three years and earnings of US$8.8 billion, reflecting concerns that faster growth from global cloud leaders could accelerate declines in IBM’s legacy business. These perspectives remind you that opinions on IBM's future can vary widely, and the latest generative AI news might prompt a reassessment of what’s possible for revenue and margins ahead.

Explore 16 other fair value estimates on International Business Machines - why the stock might be worth as much as 21% more than the current price!

Build Your Own International Business Machines Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your International Business Machines research is our analysis highlighting 1 key reward and 4 important warning signs that could impact your investment decision.
• Our free International Business Machines research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate International Business Machines' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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