Market News

IBM Completes Turbonomic Acquisition

IBM (IBM) has completed the acquisition of Turbonomic, affirming its focus on building an ecosystem of business partners. The acquisition is expected to enhance the tech giant’s push to accelerate clients’ transition to hybrid cloud and AI.

Turbonomic is also expected to complement Instana, IBM’s recent acquisition. The two are key to the tech giant’s push to launch IBM Cloud for Watson AIOps and support the automation of IT operations using AI.

Increased investments in AI-powered automation are part of IBM’s focus that seeks to help businesses succeed in the digital world. (See IBM stock chart on TipRanks).

“IBM is already helping thousands of customers use automation to make IT and business processes more efficient and employees more effective. Now that Turbonomic is a part of our portfolio, IBM is the only company providing a one-stop shop of AI-powered automation capabilities, all built on Red Hat OpenShift to run anywhere,” said IBM Automation GM, Dinesh Nirmal

IBM will leverage Turbonomic’s Network Performance Management (NPM) products and operations in the telecom industry to supplement its offerings around 5G adoption. The company intends to help customers optimize applications running on 5G environments.

Turbonomic stands to reach and serve a more robust customer base by being acquired by IBM. Additionally, it should enable the hosting of applications and operations across cloud environments. The company will also continue to build and grow the OEM relationship with Cisco (CSCO).

BofA Securities analyst Wamsi Mohan has reiterated a Buy rating on IBM with a $175 price target, implying 20.2% upside potential to current levels. The analyst expects the company to post earnings per share of $1.07 for Q2 2021.

Consensus among analysts is a Moderate Buy based on 4 Buys, 3 Holds, and 1 Sell. The IBM average analyst price target of $151.75 implies 4.2% upside potential to current levels.

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