This is shaping up to be an eventful week for International Business Machines (IBM +1.77%). The storied tech company was announced as the major focus of a significant federal government initiative to develop quantum computing, and it's pushing forward on several fronts in the field of artificial intelligence (AI)-powered cybersecurity.
Investors cheered these developments by bidding the stock up by nearly 17% week to date as of early afternoon Friday, according to data compiled by S&P Global Market Intelligence.
Federal funds
The more impactful of these two developments was the government program. On Thursday, it was announced that the Department of Commerce (DoC) was granting $2 billion to nine quantum computing companies, including IBM. In fact, IBM is the top recipient of this largesse, as it's receiving $1 billion.
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That amount will be used to develop Anderon, a new company created by IBM to be this country's first pure quantum chip foundry. IBM will match the government's $1 billion contribution to build the facility and establish the new corporate entity. Additionally, the DoC will take a small minority stake in the venture, although the size of this holding was not specified.
The company quoted Commerce Secretary Howard Lutnick as saying that "These strategic quantum technology investments will build on our domestic industry, creating thousands of high-paying American jobs while advancing American quantum capabilities."
On Tuesdays, IBM announced that a high-profile AI developer has joined Project Glasswing, the cybersecurity industry consortium it leads. It also revealed that it is bolstering its AI-supported security offerings, most prominently with the rollout of a new one, the multi-agent AI service IBM Autonomous Security.
NYSE: IBM
Key Data Points
A secure future?
Like many of the bulls piling into IBM stock over the past few trading sessions, I don't see much that's negative in either of these developments.
I feel the considerable government investment in Anderon is more than worth the restrictions the new company and factory will have to operate under. I also believe cutting-edge cybersecurity products can deliver strong returns, given the state of the world these days.
