Warren Buffett readily admits that he doesn't understand artificial intelligence (AI). He has also said that he won't invest in businesses that he understands. So, does that mean the legendary investor doesn't own any AI stocks? Nope.

Actually, Buffett has invested roughly $90 billion in nine companies that are heavily focused on AI. Here they are -- and which one is the best of the bunch.

AI stocks in Berkshire Hathaway's portfolio

Apple (NASDAQ: AAPL) ranks as the largest holding in Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) portfolio. Berkshire's stake in the iPhone maker is valued at close to $59.3 billion. Although Buffett significantly reduced the conglomerate's position in Apple last year, it still makes up 21% of Berkshire's total portfolio.

AI has been at the forefront of Apple's development strategy for years. However, the company was seemingly left behind in the generative AI race until it launched Apple Intelligence in 2024. So far, though, Apple Intelligence doesn't appear to be igniting the super-cycle of iPhone upgrades that some analysts predicted.

Amazon (NASDAQ: AMZN) is another top AI stock in Berkshire's portfolio, albeit a much smaller one. Berkshire owns around $2.1 billion of the e-commerce and cloud service giant's shares. Buffett didn't make the initial decision to buy Amazon; one of Berkshire's other investment managers (either Todd Combs or Ted Weschler) bought the stock.

Most AI models run in the cloud. As the largest cloud services provider in the world, Amazon Web Services (AWS) has been a big winner as organizations scrambled to build and deploy AI models in the cloud. Amazon is also using AI extensively internally to increase efficiency and provide more services to customers.

AI stocks in Buffett's "secret portfolio"

Apple and Amazon are the only AI stocks owned directly by Berkshire Hathaway. But I said that Buffett owned nine AI stocks. Where are the other seven? In Buffett's "secret portfolio."

General Reinsurance acquired New England Asset Management (NEAM) in 1995. Three years later, Berkshire Hathaway acquired General Re. NEAM continues to manage investments for insurance companies. Its holdings don't show up in Berkshire Hathaway's regulatory filings, but any stock owned by NEAM is also owned by Buffett.

Apple is the only AI stock in both Berkshire's and NEAM's portfolios. NEAM owns two other so-called "Magnificent Seven" stocks -- Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Microsoft (NASDAQ: MSFT). Like Amazon, both Alphabet and Microsoft are major cloud service providers and are profiting from the strong AI tailwind.

NEAM also has stakes in a couple of tech pioneers that are investing heavily in AI. IBM (NYSE: IBM) made headlines in the past with the success of its Watson AI technology. Texas Instruments (NASDAQ: TXN) isn't exactly a shining star in the AI world. However, the company makes edge AI products (AI deployed on local devices) and is working with Nvidia to develop power management and sensing technologies for data centers.

The stocks of three AI chipmakers are also in NEAM's portfolio. Broadcom (NASDAQ: AVGO) manufactures AI products, including Ethernet switches designed to accelerate AI workloads and custom AI accelerators. NXP Semiconductors (NASDAQ: NXPI) and Qualcomm (NASDAQ: QCOM) sell products that support edge AI.

The best of the bunch

If you're an income investor, Texas Instruments is probably the best pick among Buffett's nine AI stocks. Its forward dividend yield stands at 2.73%.

Alphabet is arguably the most attractively valued AI stock in the group, with growth prospects factored in. The Google parent's price-to-earnings-to-growth (PEG) ratio is 1.36.

I think the best Buffett AI stock all-around, though, is Amazon. The company is poised to profit as more organizations move their apps and data to the cloud. It still has significant growth prospects in e-commerce as well. Amazon is also expanding into new markets, including healthcare, autonomous ride-hailing, and satellite internet services.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The world is on the verge of one of the most significant technological leaps of our lifetime. Over the coming years, computers utilizing quantum mechanics will have exponentially higher capabilities than even the cutting-edge supercomputers of today.

I'm talking about quantum computing. Research from the Boston Consulting Group estimates that the quantum computing market will be worth $90 billion to $170 billion by 2040.

Naturally, investors have already begun positioning themselves for quantum computing's arrival. However, while there have been some notable upstart quantum computing stocks, they remain extremely speculative because the market opportunity is still so small.

Instead, consider these three stocks as great buys right now, in quantum computing's early years. They all give investors direct exposure to quantum computing, but aren't the all-or-nothing bets that some investors may regret going with.

1. Microsoft is a do-it-all technology winner with quantum computing exposure

It's hard to imagine Microsoft (NASDAQ: MSFT) not being in the thick of a generational leap in computing technology. Sure enough, the tech giant is deep into its efforts to develop quantum technology. Earlier this year, the company broke scientific ground when it unveiled Majorana 1, the world's first quantum chip powered by a topological core -- a new state of matter.

Microsoft's Azure is the world's second-leading cloud platform, and the company is already deeply involved in developing artificial intelligence (AI) models and other software. That means Microsoft could benefit by creating and selling quantum computing technology, as well as by deploying it throughout its existing businesses. Someday, it could be Microsoft's quantum computers powering its cloud data centers.

Investors won't get rich overnight with Microsoft, which already has a staggering $3.5 trillion market cap. Despite its size, analysts estimate that Microsoft will grow its earnings by 15% annually over the next three to five years. The company also pays dividends and has increased its payout for 23 consecutive years. Microsoft is an outstanding do-it-all blue chip technology stock to buy and hold for exposure to quantum computing with minimal risk of disaster.

2. IBM is a quantum computing stock for dividend investors

International Business Machines (NYSE: IBM), or IBM for short, is no longer as dominant as it was in the 1980s and 1990s. But to its credit, it has emerged as a strong contender in quantum computing. IBM began offering cloud-based access to its quantum computers nearly a decade ago and continues to develop improved iterations of these systems.

It has more than 13 quantum computer systems in the field today with at least 100 qubits, and has booked approximately $1 billion in cumulative quantum business since launch. That puts IBM far ahead of companies like IonQ, which has barely monetized its business, with just $43 million in annual revenue.

IBM has arguably built a solid foundation for the future as a hybrid cloud solutions company with expertise in AI and quantum technology, where it can work closely with enterprise clients. It's also an excellent dividend stock. IBM yields a solid 2.5% at its current price, and management has raised the dividend for 29 consecutive years.

3. This ETF gives investors diverse exposure to quantum computing and AI

Many experts believe that practical quantum computers may still be five to 10 years away. Given how early it is and how much things can change for companies between now and then, investors would be wise to consider an exchange-traded fund (ETF), giving them broad exposure to quantum computing. The Defiance Quantum ETF (NASDAQ: QTUM) does just that. It's an ETF focused on companies developing and using quantum and AI technology.

It has 73 holdings in all, including the following top positions:

Data source: Defiance Quantum ETF prospectus.

Another significant aspect of this ETF is that it includes non-U.S. companies, providing investors with even greater diversification in a highly speculative field. Non-U.S. companies may not list on the major U.S. stock market exchanges or may report in foreign currencies and languages, making it difficult for most individual investors to follow them.

As with many new industries, there will be some companies that emerge as huge winners in quantum computing that many people didn't see coming. By casting a wide net with this ETF, you will most likely own a piece of them.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Shares in the S&P/ASX 200 Index (ASX: XJO) telco closed Friday trading for $4.61. In morning trade on Monday, shares are changing hands for $4.60 apiece, down 0.2%.

For some context, the ASX 200 is up 0.4% at this same time.

This comes amid news of a major leadership change at the company's digital infrastructure solutions business, Telstra InfraCo.

Here's what's happening.

Telstra share price slips despite Microsoft leadership score

The Telstra share price is slipping after the company announced (in a release labelled non-price sensitive) that Telstra InfraCo CEO Brendon Riley will retire on 30 September.

Steven Worrall will replace Riley and commence on 1 September. Worrall is currently the managing director of Australia and New Zealand Microsoft Corp (NASDAQ: MSFT).

"Under Brendon, Telstra InfraCo was launched and is now a strong digital infrastructure business. I'm looking forward to Steven building on this to further develop Telstra InfraCo's leadership and credentials," Telstra Group CEO Vicki Brady said.

And the Telstra share price could get some ongoing support from Worrall's extensive experience.

Brady added:

Steven's approach to partnerships, such as Microsoft's $5 billion Australian investment in cloud computing and AI infrastructure, coupled with his experience leading and growing technology and software businesses are great fits for our ambitions for Telstra InfraCo.

She noted that Worrall's current team at Microsoft consists of more than 3,000 people who support 10,000 partners and software vendors building or selling on Microsoft's platform in Australia and New Zealand. Prior to this, Worrall held a number of senior roles at IBM (NYSE: IBM).

In farewelling Riley, Brady pointed to his "significant contributions" to Telstra over his 13-year tenure.

That included Riley's leadership in building Telstra InfraCo's portfolio, capabilities, and credentials as a leading investor and operator of Australia's digital infrastructure.

Brady said:

We will miss his passion for the company, commitment to the development of its talent, his advocacy for customers and regional Australia, and the important role he has played as a senior leader.

We all wish Brendon the very best as he moves to the next stage of his career as a non-executive director and advisor.

What's the latest from the ASX 200 telco?

The Telstra share price closed up 5.6% when the telco reported its half-year results on 20 February.

Highlights included a 0.9% year-over-year increase in total income to $11.8 billion. And with operating expenses falling, underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) were up 6% to $4.25 billion.

On the bottom line, net profit after tax (NPAT) was up 7.1% year over year to $1.1 billion.

With today's intraday dip factored in, the Telstra share price is up 25% over 12 months.

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The Dow Jones Industrial Average got off to a solid start this year. The widely reported index, consisting of 30 large-cap stocks representing multiple sectors of the economy, gained 4.7% in the first month of the year.

While not all Dow index stocks did well in January, these five Dow stocks, which come from divergent sectors, vastly outperformed the index.

1. 3M

Industrial company 3M (NYSE: MMM) was the index's top performer in January with a 17.9% gain. Part of the stock's movement came after the company reported fourth-quarter results. Adjusted sales, which remove acquisitions/sales and foreign currency effects, grew 2.1% compared to a year ago. Diluted earnings per share (EPS) fell 1.2% to $1.68.

2. International Business Machines

International Business Machines' (NYSE: IBM) shares soared 16.3%. Its fourth-quarter sales increased a tepid 2% after removing the effects of foreign currency translations. However, investors were undoubtedly pleased about IBM's progress on the generative artificial intelligence front with management reporting its book of business grew to $5 billion.

3. Goldman Sachs

Goldman Sachs' (NYSE: GS) stock price leapt 11.8% last month. The financial services company reported strong fourth-quarter results. Quarterly revenue grew 23% year over year to $13.9 billion, and diluted earnings per share more than doubled to $11.95.

Its businesses span investment banking, trading, asset management, and other banking services such as credit cards.

4. JPMorgan Chase

JPMorgan Chase (NYSE: JPM) saw its share price increase 11.5% in January. The banking giant reported fourth-quarter revenue grew 10.9%, driving diluted earnings per share more than 58% higher.

JPMorgan Chase's businesses include banking for consumers and businesses, investment banking, and asset management.

5. Amgen

Amgen's (NASDAQ: AMGN) shareholders were undoubtedly pleased with the stock's 9.5% appreciation. Although no specific news seemed to drive the price increase, the company has a history of developing treatments for ailments such as heart disease, cancer, and osteoporosis.

Given people need their medications, Amgen's results tend to do well no matter what happens with the economy and people's personal finances.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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There's a reason so many investors want to own Warren Buffett stocks.

The so-called Oracle of Omaha has trounced the market in his long history an investor. Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has nearly doubled the annual return of the S&P 500 for nearly 60 years, and thanks to the magic of compounding, that means Berkshire has returned more than 100 times what the S&P 500 has in that time frame.

Luckily, for investors, Warren Buffett's playbook is wide open, and he's made it clear what kinds of stocks he favors. Here are five simple questions to ask to determine if a stock would get the Buffett stamp of approval.

1. Does it have an economic moat?

Buffett's favorite concept in all of investing may be the "economic moat," or what most investors call a sustainable competitive advantage. Buffett once said, "The most important thing [is] trying to find a business with a wide and long-lasting moat around it, protecting a terrific economic castle with an honest lord in charge of the castle."

As he alludes to in that statement, this key attribute protects the company from competitors. Buffett likes stocks with well-known brands such as Coca-Cola or Apple; companies with limited competition and barriers to entry, like the railroad BNSF that he acquired a decade ago; or companies with strong market share and recurring revenue, like GEICO.

If you want to know if it's a Buffett stock, ask yourself if the company can withstand competition over a long period of time.

2. Does it produce cash?

Buffett doesn't generally waste his time with unprofitable growth stocks. He looks for companies that generate cash. 

Buffett likes to own businesses like insurers that produce cash in premiums that come in advance of claims. He refers to this as a "float" that allows him to reinvest that cash in stocks. He also likes sectors such as energy (for example, Chevron stock), which generate high levels of cash flow when oil prices rise. Buffett's a fan of banks and financial companies like Bank of America and American Express that have reliable profit generation from commercial lending, and he's known to invest in utilities and healthcare, which tend to generate steady cash flows.

What you'll find among almost every Buffett stock is that they produce reliable cash flow, and many of them pay a dividend. 

3. Does it have a long track record? 

Warren Buffett doesn't generally chase the latest trends whether they be dot-com stocks in the 1990s or cloud software stocks more recently.

Instead, he prefers to own companies with long track records and operating histories. Often, he's studied these companies for years, or is well-acquainted with their brands. With Coca-Cola, for example, he had seen its success for 50 years before becoming an investor. When Buffett decided to invest in tech, he bought stock in IBM, because he'd followed it for decades and understood the business. While that investment didn't pan out, it nonetheless reflects Buffett's approach of studying a company for a long time.

Similarly, in financials, he prefers legacy banks over fintech, because banks have proven their business models over long periods of time. Not only are they less risky, but they also generate reliable cash flow.

4. Does it outperform in bear markets?

Historically, Berkshire has best demonstrated its fortitude during bear markets. Buffett hoards cash to buy stocks when they're cheap, and he's known for taking advantage of sell-offs like during the financial crisis when he took a high-yielding stake in preferred stock in Bank of America. Berkshire has also outperformed the stock market by a wider margin in bear markets, including this year.

Because many of Buffett's favorite stocks have stood the test of time, they tend to do well in bear markets, and many of his favorite industries -- including consumer staples, insurance, utilities, and healthcare -- are known for being recession-resistant.

Buffett doesn't exclusively buy recession-proof stocks. He owns cyclical stocks in industries like energy, banking, and industrials, but in general, he prefers to buy stocks that can outperform in bear markets or at least have demonstrated an ability to recover from them.

5. Is it a good value?

Finally, Buffett is a classic value investor. He wants to buy stocks that are trading below their intrinsic value, which is typically estimated with a discounted cash flow model.

The quality of the company is more important to the Berkshire chief than the price. He has famously said, "It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

However, if he finds a stock he likes, he'll only buy it if he believes it's a good value at the current price. In the bull market during the 2010s, Buffett often lamented that stocks had become too expensive. With prices now down, it wouldn't be surprising to see Berkshire deploying its cash hoard, which is currently worth more than $100 billion.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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While tech stocks were hammered in 2022, the cloud computing industry barreled along at an impressive growth rate. According to research firm Gartner, the public cloud sector alone is estimated to grow 20% this year.

This amounts to nearly half a trillion dollars in 2022. Just a decade ago, global public cloud computing revenue was a mere $26.4 billion.

Given the cloud industry's rapid expansion, competitors abound. Among the bigger players are tech giants IBM (NYSE: IBM) and Google Cloud, owned by Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG).

Both are seeing strong growth in their respective cloud businesses. But if you had to choose between the two, which company offers the better investment opportunity? Let's dig into each to arrive at an answer.

IBM's cloud strategy

IBM spent the past few years reinventing itself into a hybrid cloud-focused company. In a hybrid cloud implementation, a business employs both public and private clouds, using the former to perform basic IT infrastructure tasks, such as hosting a corporate website, and the latter to secure confidential or critical data, including financial and customer records.

IBM was smart to focus on this area. The hybrid cloud market is forecasted to grow from $85.3 billion last year to $262.4 billion by 2027.

In addition, IBM's impressive list of enterprise clients is an ideal fit for hybrid cloud solutions. Big Blue's customers include the top ten banks, governments, and healthcare companies in the world. These industries need the security of a private cloud while capturing the cost savings of a public one.

IBM's hybrid cloud strategy proved successful. In its third-quarter earnings report, IBM generated revenue of $14.1 billion, a 6% increase over 2021. This is the third consecutive quarter of year-over-year revenue growth despite macroeconomic headwinds, such as a strong U.S. dollar.

Big Blue also offers an attractive dividend, yielding about 4.8% at the time of this writing. The company can maintain this robust dividend thanks to its free cash flow (FCF). IBM expects to hit $10 billion in FCF this year, while dividend payments totaled about $6 billion over the trailing 12 months.

IBM has a strong dividend track record, paying consecutive quarterly dividends since 1916. It also raised its dividend in April, marking 27 consecutive years of dividend increases.

Alphabet's Google Cloud approach

Alphabet is building its Google Cloud business in the same way it generated success for its famed Google search engine: by prioritizing customer acquisition and revenue growth over profitability.

That's why Google Cloud is currently unprofitable, exiting the third quarter with an operating loss of $699 million. But its business is growing rapidly. In just three quarters this year, Google Cloud's sales nearly matched all of 2021's income, continuing a multi-year streak of rising revenue.

Data source: Alphabet. YOY = year-over-year.

Google Cloud comprised only about 10% of Alphabet's Q3 revenue, but it's already ranked the third-biggest cloud computing company behind industry leaders Amazon and Microsoft. And Alphabet continues to aggressively invest in Google Cloud despite closing down other bets such as its Stadia video games division.

For instance, Alphabet acquired cybersecurity firm Mandiant in September for $5.4 billion, marking one of the company's biggest acquisitions in its history. Mandiant will boost Google Cloud's security in a world where remote workers grew from 23% of the American workforce before the coronavirus pandemic to nearly 60% in 2022.

Is IBM or Alphabet the better investment?

Both IBM and Alphabet have proven successful in their cloud endeavors, so investing in either is worthwhile. After all, the cloud computing industry is forecasted to grow from $706.6 billion last year to $1.3 trillion by 2025.

But if I had to choose one of these cloud computing companies to invest in, I would lean toward Alphabet despite IBM's success and attractive dividend.

Google Cloud's revenue is already edging past Big Blue. IBM's hybrid cloud revenue over the past 12 months totaled $22.2 billion. Google Cloud's revenue was $24.5 billion over the same time period.

Granted, Google Cloud's success can be overshadowed by Alphabet's digital advertising business, which accounted for $54.5 billion of its $69.1 billion in Q3 revenue. And the advertising industry is experiencing a downturn this year, leading Alphabet's Q3 ad revenue to increase just 2.5% year-over-year.

But Alphabet's ad business helps fund Google Cloud. Alphabet generated $63 billion in FCF over the past 12 months, while IBM expects to achieve a cumulative FCF total of $35 billion across three years, from 2022 to 2024.

Also, Alphabet possesses several factors, along with Google Cloud, that make the company an alluring investment, including its dominance in search advertising. Alphabet increased revenue 41% year-over-year in 2021, and its revenue continues to grow this year, reaching $206.8 billion over three quarters compared to $182.3 billion last year.

Google Cloud's strong growth, Alphabet's hefty FCF, and the company's other areas of strength provide compelling reasons to make Alphabet the better choice for an investment in the rapidly rising cloud computing industry. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Will these US-listed shares be able to deliver the goods? Here's a quick look.

US shares reporting earnings this week

International Business Machines Corp (NYSE: IBM)

International Business Machines Corp (IBM) is set to report its second quarter earnings after market close on Monday (American time).

The company is a global technology company that provides hardware, software, cloud-based services, and quantum computing. IBM has been on an acquisition spree, buying companies like BoxBoat Technologies and Red Hat Inc to expand its business.

Analysts are forecasting the company to report revenue of $18.3 billion. This would represent an increase of 3% on the prior corresponding period. Shares in the US company have gained 12.1% year-to-date (YTD) – currently at US$138.90.

Netflix Inc (NASDAQ: NFLX)

Video streaming giant Netflix will report its earnings after the US share market closes on Tuesday.

Investors are especially interested to see if Netflix can continue to grow as it faces competition from streaming services like Disney Plus, Hulu, Amazon Prime Video, HBO Now, and others. With so many options for entertainment at our fingertips these days, investors want to know if Netflix has what it takes to remain a leader in the industry.

Last quarter, the company remained adamant that weakness in user growth was the fault of temporary challenges and not competition. Shares in this US stock are trading 1.4% higher YTD.

Johnson & Johnson (NYSE: JNJ)

Next on the list is American health care and pharmaceutical manufacturer Johnson & Johnson. The 135-year-old company is slated to report its quarterly results before the US share market opens on Wednesday.

Analysts at Wells Fargo are forecasting $22.7 billion in total sales for the quarter. On the other hand, the consensus estimate is at $22.5 billion. It will be interesting to see if the company's COVID-19 vaccine rollout has had any impact – with Johnson & Johnson intending to sell its vaccines at cost.

At the time of writing, shares in the US multinational giant are 7.4% higher YTD – fetching US$168.1.

Snap Inc (NYSE: SNAP)

The parent company of social media app Snapchat is set to release earnings after market close on Thursday. Shareholders will be waiting with bated breath for the company's performance.

The messenger app has continued to enjoy a rise in popularity over the past year. Furthermore, the last quarter saw daily active users increase 22% from the prior year to 280 million. According to Yahoo Finance, the average estimate for revenue for this quarter is US$845 million. This would represent an increase of 92.5% on the prior corresponding period.

Shares in the US messenger company have surged 19.6% YTD. As a result, Snap has outperformed the S&P 500 index by ~2.7%.

Twitter Inc (NYSE: TWTR)

Finally, Twitter is expected to release its quarterly earnings after the US share market close on Thursday. Shareholders will be looking to see how engagement has tracked on the social platform as the world adapts to the 'new normal'.

After revealing plans to nearly double revenue to US$7.5 billion by 2023, this quarter's result could make or break investors' belief in such a target. Additionally, the company has been struggling to effectively monetise its platform, resulting in substantial losses on the bottom line over the last 2 years.

Despite the uncertainty, shares in this US social networking company are up 21.8% YTD. At the time of writing, Twitter shares are going for US$66.41 apiece.

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At the time of writing, the Straker Translations' shares are up 10.83% to $2.00.

A 'transformational' year

Investors are scrambling to get a hold of Straker Translations shares this morning following the company's update. In the release, the company points to a strong outlook for the 2022 financial year. This is thanks to its leadership in the consolidating global language services sector.

Straker also touched on its performance highlights for FY21, these included:

• Revenue increase of 13% to $31.3 million for year ending March 2021
• On a proforma basis, unaudited revenue tops $41 million for FY21
• Lingotek acquisition delivers $1.9 million in revenue within two months of integration.
• Net losses after tax increase to $6 million from $2.5 million.

These results were previously published in April. However, now they are audited and official.

The big-ticket item for Straker is its appointment as strategic translations provider to IBM (NYSE: IBM).

Additionally, the acquisition of US-based Lingotek has also been described as 'transformational' for the company. The deal has added $11 million in annual incremental revenue for Straker.

Positive outlook lifts Straker Translations share price

Notably, Straker advised it forecasts revenue for 2022 financial year to exceed $50 million with an improved gross margin.

The company reasons there is a growing recognition among enterprise customers of Straker's global reach and the benefits of its RAY translation platform. Furthermore, the inclusion of Lingotek pushes the company's proforma revenue to $41.2 million – representing a 48% increase on the prior year.

Commenting on the update, Chief Executive and Co-Founder Grant Straker said:

Our strategic priorities are clear. We are focused on driving consolidation in the translation sector, building repeating revenues – particularly among the large global enterprises that benefit from Straker's global reach and our Ai-Powered RAY translation platform – and continuing to consolidate our technological leadership.

While the company suffered challenges from COVID-19, it believes it is also creating opportunities. Considering the deferral or cancellation of work has weighed more so on smaller translation companies, this has put more pressure on the consolidation of the industry.

The post Why the Straker Translations (ASX:STG) share price is rocketing today appeared first on The Motley Fool Australia.

At the time of writing, the advanced material company's shares are going for 90.5 cents a pop, up 6.4%.

What's driving the Archer share price higher?

Investors are pushing Archer shares higher today after the company provided a positive update.

According to its release, Archer advised it has executed a new quantum computing agreement with IBM Common Stock (NYSE: IBM).

Under the framework, both companies will work together in developing quantum computing. Archer will retain membership to the global IBM Quantum Network as well as the related IBM Quantum Start-up Program.

In addition, the collaboration also gives Archer the opportunity to advance its work under the previous agreement signed with IBM. This entailed Archer becoming a member of the invitation-only IBM Q Network and associated IBM Quantum Experience for Business program.

As a result of the agreements, Archer will have continued access to IBM's quantum computing knowledge and resources. This supports the company's efforts in building a qubit processor chip that can operate at room temperature and integrate into modern electronics.

Current quantum computing technologies are limited because they use qubit processors that can only operate at low temperatures and are difficult to integrate into today's applications.

Archer CEO, Dr Mohammad Choucair hailed the partnership with IBM, saying:

We are at an early stage in terms of the work that needs to be done with IBM, so we are looking forward to our continued collaboration.

When we see what has been achieved in the quantum ecosystem to date, we are determined to actively engaging in, and contributing to, the global IBM Quantum Network.

Archer is making crucial steps towards its goal of enabling practical quantum computing applications, and IBM is helping us get there.

The Archer share price has gained over 350% in the past 12 months and is currently sitting above 60% year-to-date.

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During the late afternoon trade, the information technology service provider's shares are up 8.3% to 33 cents. It's worth noting that when the market opened, the Nexion share price hit an all-time high of 41 cents.

What's the deal?

According to its release, Nexion advised it has secured a contract with IBM Australia for a term of 5-years.

Under the agreement, Nexion will deploy a number of its products to IBM for a project located in Western Australia. This will include Nexion OneCloud infrastructure-as-a-service (IaaS), network links, session initiation protocol (SIP) voice services, security, and desktop support as well as managed services.

The deal is expected to generate revenue of around $4 million for Nexion. This follows a previous significant IBM solutions contract in the Nexion W1 Data Centre signed in the last 12 months.

Words from the Nexion CEO

Nexion CEO Kevin Read welcomed the deal, saying:

We are excited to be working with IBM, a recognised global technology leader. This deal helps underpin our global growth strategy based on key partnerships and to have a company of IBM's caliber select Nexion is a phenomenal outcome.

Hybrid Cloud is one of the fastest-growing cloud segments and NEXION is proud to be an emerging global cloud, security, networking and data centre player.

Growth strategy in progress

Management noted that the newly signed contract, along with the go-live of its Perth Aryaka points of presence (PoP), was a major milestone for the company.

Nexion plans to expand its presence through deploying OneCloud Nodes across strategic locations. So far, existing OneCloud nodes are in Perth, Melbourne, and Adelaide. Others are expected to come to other Australian capital cities.

Furthermore, Nexion will look to penetrate the New Zealand market and abroad.

About the Nexion share price

Since listing on the ASX boards in the middle of this month, the Nexion share price has doubled in value.

The company offered up to 40 million shares with a price of 20 cents apiece to raise $8 million.

Based on the current share price, Nexion has a market capitalisation of around $21.3 million.

The post Why the Nexion (ASX:NNG) share price is racing 8% higher appeared first on The Motley Fool Australia.

A privately held business named Lygon made the announcement on Tuesday, showing how it implemented blockchain to create digital bank guarantees.

The company is a joint venture between Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking GrpLtd (ASX: ANZ), Westfield owner Scentre Group (ASX: SCG) and IBM (NYSE: IBM).

Blockchain, also referred to as a decentralised database, is a technology that "chains" together bits of data stored with individual users to form one big coherent picture. It's the same technology that cryptocurrencies like Bitcoin, Ethereum and Dogecoin are based on. 

Paper-based bank guarantees have a more than 200-year-old history in Australia. 

Lygon chief Justin Amos said the digitisation of such an old system was a massive milestone.

"Lygon is paperless, transparent, accessible, and standardised, removing the inefficiencies, costs, and risks associated with a paper-based system," he said.

"The ability to reduce the risk of fraud and handling errors is a major advantage to Lygon, particularly given the heightened focus on digital security for businesses of all sizes and scale these days."

Reducing a 4-week transaction into 1 day

Bank guarantees assure a payee that if a payer defaults on money owed, the financial institution would cover the shortfall.

In the example of a residential tenancy agreement, Lygon's blockchain has condensed a manual process that can take 4 weeks into potentially 1 day.

"Banks can maintain database ledgers of all digital guarantees in existence, with access to a full and auditable history of every transaction ever made," said Amos.

"Landlords are not at risk of losing or holding invalid guarantees, and retailers, as well as other tenants, have a simplified and fast system for providing security and accessing premises sooner."

ANZ banking services lead Nigel Dobson said 3 parties were usually involved in a bank guarantee.

"The Lygon platform actually benefits all 3. It's a win-win-win situation."

For CBA global client solutions chief Jessica Dwyer, the blockchain technology lies in cutting out numerous gratuitous manual steps.

"Reducing the multiple hand-off points, reducing the necessity of our customers to walk in and out of a branch, buying down the risk that's associated with fraud."

The Lygon joint venture is also working on other financial uses for blockchain, Amos said.

"Our core technology can be applied to other types of payment guarantees and financial instruments, such as performance bonds, offering a wide range of opportunities to pursue as we expand Lygon's reach and service offering."

The post CBA, Westpac, ANZ adopt same tech as Bitcoin appeared first on The Motley Fool Australia.

But even a quality as ethereal as brand value can be measured.

Each year, United States consultancy, Interbrand, publishes a list of the top 100 brands in the world.

Clare Capital analyst, Robin Basra, said the rankings are calculated as a combination of three attributes – financial forecasts, the role of the brand and the strength of consumer preference for the brand.

And the world has dramatically shifted to technology over the past 10 years.

"A decade ago, Coca-Cola Co (NYSE: KO), IBM (NYSE: IBM), Microsoft Corporation (NASDAQ: MSFT), Google (Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG)) and General Electric Company (NYSE: GE) represented the most valuable brands in the world," said Basra.

"In 2020, Google and Microsoft retain their positions, Apple Inc (NASDAQ: AAPL) has replaced IBM as the most valuable technology brand, and the others have fallen lower down the order – signalling changing dynamics and consumer preferences."

Another nod to the way the globe is shifting is that a non-American company, Samsung Electronics Co Ltd (KRX: 005930), snuck in at fifth place.

Valuable brands outperform rest of share market

This brand value thing matters on the stock market. 

In a year when most publicly listed companies were hammered by COVID-19, the share prices of the five most valuable brands were up 54% on average.

Even when generalised out to the 100 most valuable brands, their collective share price has outperformed the S&P 500 Index (SP: .INX) by more than double.

Most valuable brands by sector

The brand leaders for each sector have also shown healthy share price growth. 

The exception is Toyota Motor Corp (TYO: 7203), which perhaps isn't surprising considering the economic downturn.

The post What COVID-19? World's 5 most valuable brands are up 54% appeared first on The Motley Fool Australia.

Even though 2.93% is a hefty one-day gain by any means, Dubber shares were actually doing much better earlier in the day. The Dubber share price climbed as high as $1.64 soon after market open (a rise of nearly 6% and a new 52-week high) before settling at the current share price soon after. For comparison, the S&P/ASX 200 Index (ASX: XJO) is down 0.25% at the time of writing.

So why is this ASX tech share defying the broader market today and climbing high?

Share purchase plan swamped

Today, we got news from Dubber that its share purchase plan (SPP) has been successful – extremely successful, it seems.

In an ASX release to the market this morning, Dubber told investors that it has received over $33 million in applications for the SPP, well over the targeted $6 million initially flagged.

As a result, the company will reportedly endeavour to accept $10 million in applications by scaling back its acceptance of SPP offers. This will result in the issuance of just over 9 million shares.

The initial Dubber retail SPP closed on Friday 6 November and involved the opportunity for 'eligible shareholders' in Australia and New Zealand to apply for up to $30,000 worth of new shares each at the price of $1.10 a share.

A preceding SPP for institutional investors also took place last month, which raised another $35 million.

What else has been moving the Dubber share price?

It's also worth noting that this cloud data company has had a very busy week, and indeed month – in fact, the Dubber share price is up almost 45% over the past month alone.

Last week, Dubber announced that the company had been selected as the recording and data capture platform for big blue itself, IBM (NYSE: IBM). IBM has launched a new service, the IBM Cloud for Telecommunication Services platform, and Dubber is playing a central role.

IBM is a behemoth company with a market capitalisation of ~US$104 billion, so this is obviously big news for the $378 million-sized Dubber. The Dubber share price shot up 8% on the news.

That was on top of the announcement last month that Dubber has launched an artificial intelligence solution for Microsoft Teams, owned by Microsoft Corporation (NASDAQ: MSFT), which sent Dubber shares up 16%.

The post Why the Dubber Corp (ASX:DUB) share price is surging today appeared first on The Motley Fool Australia.

At first glance, International Business Machines' (NYSE: IBM) third-quarter results looked disappointing, featuring declining revenue and shrinking earnings per share. But as has often been the case with the giant tech company, one-time items again muddied the picture. And based on conditions in its underlying business, the stock may constitute an interesting investment opportunity.

Weak results

IBM's revenue declined by 3.9% year over year to $18.0 billion during the third quarter. But excluding the effects of foreign currency and divestitures, the top line fell only 0.6%. Still, the company's fifth consecutive quarter of revenue declines should worry investors, especially since this was the first time that figure included $371 million from IBM's $34 billion Red Hat acquisition. 

Also, IBM's GAAP operating margin dropped from 16.0% to 8.4%. And despite an effective tax rate of negative 9.9%, its GAAP net income decreased 38% year over year, from $2.69 billion to $1.67 billion. 

During the earnings call, management highlighted the point that they had cut the company's $73 billion debt load by $6.7 billion to $66.3 billion. But that success isn't as significant as management suggested, due to the decrease in cash and equivalents. Excluding the impact of the Red Hat acquisition on IBM's cash balance, its net debt decreased by only $3.85 billion compared to the previous quarter.

Temporary issues

Short-term challenges explain the quarter's negative results.

Revenue from IBM's systems segment, which includes servers and storage systems, dropped 14.7%. But that performance shouldn't surprise investors. The third quarter marked the end of an IBM product cycle -- the company started shipping its new mainframe z15 server during the last week of September. Thus, revenue from the systems segment should increase over the next several quarters.

The decline in IBM's global technology services -- GTS -- was more surprising. GTS consists of managed and outsourcing services, cloud-delivered services, and maintenance activities. Since this segment provided 38.8% of the company's total revenue at a gross profit margin of 35.8% during the quarter, its performance impacted IBM in a meaningful way.

Management pinned the 5.3% decline in GTS revenue on a lack of extra business beyond that which the segment booked prior to the quarter. But that should turn around since signings -- a leading indicator of revenue -- increased by 20% during the third quarter.

Growth on the horizon

Beyond the challenging short-term results, there are credible scenarios for IBM to deliver revenue growth.

Under GAAP rules, Red Hat contributed $371 million to IBM's revenue during this recent quarter, but had it remained an independent company, with the same underlying results, it would have reported revenue of $987 million. The difference arises from a rule that requires companies to recognize their acquisitions' deferred revenues at fair value. This has one important consequence: It will lower the amount of revenue IBM will recognize from its Red Hat acquisition over the next few quarters. But it will also give the company favorable comparisons further down the road.

In addition, since Red Hat was purchased, its normalized revenue growth accelerated from percentages in the mid-teens to 20%. IBM is already taking advantage of cross-selling opportunities to propose Red Hat solutions to its large client base. 

And taking into account the new product cycle in IBM's systems segment, management confirmed it is still targeting revenue growth in the mid-single-digit percentages over the medium term -- the same forecast it announced after the Red Hat acquisition.

A simple and attractive investment proposition

With only one quarter left in 2019, IBM's management still forecasts non-GAAP earnings per share and free cash flow to reach $12.80 and $12 billion, respectively, for the year.

At the time of this writing, the market values this tech stock at a forward P/E ratio of 10.2 and at a free-cash-flow multiple of 9.9. Those modest valuation figures indicate the market doesn't expect much growth. Thus, long-term investors should consider IBM as a slow-growth investment at a reasonable price.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post IBM's weak results hide its growth potential appeared first on The Motley Fool Australia.