Yahoo Finance IBM Reportedly in Advanced Discussions to Acquire HashiCorp
International Business Machines Corporation IBM is in advanced discussions to purchase HashiCorp Inc. HCP, per a Wall Street Journal report. Based in California, HashiCorp is a software company that enables organizations to efficiently automate multi-cloud and hybrid environments with its Infrastructure Lifecycle Management and Security Lifecycle Management solutions.
Earlier this year, a Bloomberg article hinted at HashiCorp considering a potential sale. The company has consistently exceeded earnings expectations, delivering a trailing four-quarter earnings surprise of 164.58% on average. In the last reported quarter, both the top line and bottom line of HCP surpassed the respective Zacks Consensus Estimate. At present, HCP has a market capitalization of approximately $5.8 billion, while IBM stands at $167 billion.
In the backdrop of an evolving digital landscape and growing cloud adoption, businesses are seeking solutions to simplify cloud resource management and automation. To capitalize on this trend, IBM is making substantial investments to enhance its hybrid cloud portfolio.
It is placing strong emphasis on a multi-cloud approach, which involves utilizing cloud services from multiple vendors. This strategy empowers businesses to improve performance, optimize expenses and mitigate risks associated with vendor lock-in. Moreover, IBM hybrid cloud blends in public cloud, private cloud and on-premises infrastructure to develop a single, flexible, cost-optimal IT infrastructure. IBM’s offerings include a range of cloud deployment and management tools that are portable across different cloud environments.
Several leading enterprises across industries, such as Samsung, Autodesk, Lufthansa, including IBM, have utilized HCP’s services in the past. HashiCorp's widely used offerings streamline the deployment, scaling and security of applications across various cloud environments.
The rumored acquisition will significantly augment IBM’s capabilities to assist enterprises in managing complex cloud environments. Moreover, HashiCorp’s tool sets will likely complement IBM RedHat’s portfolio bringing additional functionalities for cloud infrastructure management. Integration of HCP’s cloud software capabilities will bolster IBM’s hybrid multi-cloud approach.
IBM had announced more than 10 acquisitions in the past year, including a $2.13 billion deal to acquire Software AG’s iPaaS (integration platform-as-a-service) businesses. However, the $34 billion Red Hat buyout remains its biggest acquisition to date. In a broader context, IBM’s acquisition strategy highlights its long-term vision to develop a robust and resilient cloud portfolio catering to the diverse needs of businesses across sectors. Looking ahead, IBM is expected to pursue strategic buyouts and foster innovation to strengthen its position as a leading provider of hybrid cloud solutions.
The stock has gained 45.6% in the past year compared with the industry's growth of 35.2%.
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Zacks Rank & Stocks to Consider
IBM carries a Zacks Rank #3 (Hold) at present.
Pinterest PINS, sporting a Zacks Rank #1 (Strong Buy) at present, delivered a trailing four-quarter average earnings surprise of 37.42%. In the last reported quarter, it delivered an earnings surprise of 3.92%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pinterest is increasingly establishing a unique value proposition to advertisers that could provide a competitive advantage in the long haul. Through various innovations, it continues to dramatically improve the advertising platform, which appears to be one of the best ad platforms for consumer discretionary brands looking for ways to reach customers and stretch smaller ad budgets.
Arista Networks, Inc. ANET, sporting a Zacks Rank #1 at present, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 17.5% and delivered an earnings surprise of 13.3%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200 and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
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