Quantum leap
Digital revival at IBM
Good morning, neural navigators. This is your Stock Market Rundown for February 1st, 2024. Thanks for joining me. Let’s dig in:
TODAY’S TOP STORY: LEARNING COMPUTERS
These days, there’s a lot of excitement—and hype—about artificial intelligence. Tools like chatbots, image generators, and predictive analytics can boost our productivity—or steal our jobs.
In fact, soon the only human job left might be “guy who stands beside the computer, ready to unplug it if it becomes self-aware.” And you’ll need a PhD to get it.
IBM was an early pioneer in AI, and its innovations racked up a string of wins. In 1997, its Deep Blue supercomputer beat the reigning world chess champ Garry Kasparov. And in 2011, IBM’s Watson won Jeopardy.
But IBM failed to monetize or build on its successes, and fell behind. Sure, IBM’s portfolio of enterprise services businesses gushed a torrent of cash flow… but they only squeezed out a dribble of revenue growth.
Now, things might be changing, thanks to CEO Arvind Krishna. When he took the reins in 2020, he fired off an email to all employees saying AI would be a priority under his watch.
And it’s investing $500 million in AI startups. (If you can’t innovate, buy somebody who can.) Thanks partly to the focus on AI, IBM’s stock price recently hit a 10-year high.
Krishna doesn't buy into the fear that AI will render humans as outdated as fax machines and floppy disks. He thinks AI will “augment” workers rather than replacing them.
Bots and humans working together? Hopefully this doesn’t mean we all spend the rest of our careers doing those “select which of these pictures contain traffic lights” puzzles.
SO WHAT ELSE IS GOING ON?
Tractor maker Kubota got its wrists slapped by US regulators for labeling parts “Made in USA” when they were actually made entirely overseas. Just change the legal name of the company to “Made in USA”, problem solved.
Ah, spring: the return of blossoms to the trees, birds to their nests, and bros to their burritos. Chipotle is hiring 19,000 additional employees to get staffed up for “burrito season”, which apparently runs from March to May.
The American consumer is snowed in, with severe winter weather thwarting shopping trips. “As it turns out, no one goes out in negative 10 degree weather,” the CEO of Visa quipped on a recent earnings call. Does this mean I’ll actually be able to find a parking space at Costco?
Microsoft’s market cap just surpassed three trillion dollars. Meanwhile, the combined value of all British public companies is $2.8 trillion. The UK may have the Royal Family, Shakespeare, and the Beatles, but that’s no match for Excel, Xbox, and Internet Explorer.
So concludes today’s program; tune in tomorrow for more at our usual morning hour. Yours in capitalism, The Axe