International Business Machines Corporation IBM-owned IBM Watson Health and San Diego-based genome sequencing firm Illumina ILMN have inked a partnership to achieve better interpretation of genome data through the integration of Watson for Genomics with Illumina’s tumor sequencing protocol and the BaseSpace Sequence Hub.
Cancer researchers who currently use Illumina’s TruSight Tumor 170 (a cancer genome sequencing panel) will be benefitted due to this partnership as the integration with Watson for Genomics will pave the way for rapid access and interpretation of a wide array of genome data that is currently being produced by the TrueSight Tumor 170.
The integration is expected to be complete by early 2017.
International Business Machines Corporation Price and Consensus
What Does this Mean for IBM?
Notably, this is yet another win for IBM’s Watson which is increasingly seeing adoptions across various industries.
During Dec 2016, IBM’s Watson was adopted by the Lotte Group to drive innovation across its business verticals. (Read More: IBM's Watson to Enable Lotte Gain Insight into Customer Data).
Also, during the same time, IBM’s Watson was adopted by Unruly, a British ad tech company to build a new cognitive powered psychographic targeting tool in order to make digital video ads more audience targeted and thus, more effective. (Read More: IBM Watson to Make Unruly's Digital Video Ads More Targeted)
Per an IDC report, worldwide spending on cognitive systems and artificial intelligence is estimated to be over $47 billion by 2020 from $8 billion at present. The segment is projected to grow at a CAGR of 55.1%. However, with the presence of big players like Alphabet GOOGL-owned Google’s DeepMind, Amazon’s AMZN Amazon AI and Microsoft’s Artificial Intelligence and Research Group, stiff competition persists.
Given IBM Watson’s growing popularity, we anticipate to see more of such adoptions in the future, which will definitely have a positive impact on the company’s bottom line.
Stock Performance Overview
Shares of IBM have underperformed the broader Zacks Computer Integrated Systems industry over the last 12 months. While the industry generated a return of 38.4%, the stock gained 25.9%.
The underperformance of the stock could be attributed to the ongoing and heavily time-consuming business model transition to the cloud. Further, sluggish IT spending, particularly in the on-premises and data center hardware and foreign exchange volatility remain the primary concerns. Also, intensifying competition in the cloud is a major headwind.
At present, IBM carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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