IBM's Focus On Digital Overhaul Of Sports Holds Promise

International Business Machines Corporation (NYSE:IBM) is benefiting from notable customer wins, especially in the sports domain of late.

IBM is introducing several initiatives to boost experience of the entities involved in sports leagues, from players, coaches, fans to management.

The sturdy artificial intelligence (AI) capabilities of IBM Services position it well to facilitate digital overhaul of various sports organizations and clubs with enhanced player and fan engagement.

The company’s bid to integrate AI into sports systems’ is in sync with its strategy to go beyond fan engagement to influencing players with robust strategies. These innovative solutions aided by IBM’s Watson poises the company well in gaining momentum.

Corinthians to Leverage IBM Services Platform & Watson

Corinthians Paulista, one of the most renowned Brazilian soccer clubs, opted for IBM Services. Per the 10-year deal with IBM, Corinthians attempts to revamp its Arena and leverage cognitive delivery capabilities of IBM’s Services platform in a bid to bring about digital transformation.

IBM Services and Watson together with IBM Cloud hosted loyalty platform, named "FielTorcedor" will enable Corinthians with end-to-end management as well as digitization of its legacy systems and other information technology processes.

Notably, Corinthians anticipates prominent digital changes, including customized fan engagement and enhanced player experience with meaningful insights by 2019.

This is yet another tailwind for IBM’s cognitive solutions which are witnessing increasing adoption across other forms of sports and various industries.

Notable Alliances with US Open & Wimbledon Bode Well

IBM strengthened partnership with United States Tennis Association (“USTA”) in the recent past. IBM Watson was selected on the basis of its robust AI capabilities to aid US Open Tennis players to enhance their game strategy and preparation.

Additionally, IBM’s AI Highlights technology integrated into player performance enabled coaches to analyze and improve the performance of the players.

Furthermore, IBM Watson AI capabilities have also been leveraged by The All England Lawn Tennis Club (“AELTC”) to boost engagement for Wimbledon fans.

To Conclude

In this era where fans are glued to updates on their teams or sports clubs almost 24/7, AI is increasingly being leveraged to transform fan experience by enhancing engagement methodologies.

Additionally, AI tech is also enabling sports team managers to analyze player performance. The insights obtained through rigorous analytics in turn assists player with improved performance.

Moreover, per a recent IDC report, worldwide spending on cognitive and AI systems is estimated to be over $77.6 billion by 2022 at a CAGR of 37.3% from 2017 to 2022. The report favors the prospects of IBM cognitive services and AI-powered Watson.

Given growing popularity of IBM Services and Watson, we anticipate seeing more adoptions of this kind in the future. This is expected to have a positive impact on the company’s top line.

However, inconsistent revenue growth, slow transition to cloud and increasing competition are major concerns.

Zacks Rank & Key Picks

IBM carries a Zacks Rank #3 (Hold).

Upland Software (NASDAQ:UPLD) , SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) and Alteryx, Inc. (NYSE:AYX) are a few stocks worth considering in the broader technology sector. All the three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Upland Software, SS&C and Alteryx are currently pegged at 20%, 13.5% and 8%, respectively.

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