What happened: IBM (IBM) shares erased earlier gains to slip into negative territory on Thursday.
What’s behind the move: The enterprise information technology company unveiled what it called the world’s first sub-1-nanometer (nm) chip technology.
“IBM’s new sub-1 nm chip packs nearly 100 billion transistors onto a chip the size of a fingernail, nearly twice the density of IBM’s 2 nm chip, unveiled in 2021,” the company said in a statement.
IBM said the new chip will offer a substantial leap in capability, “supercharging compute for applications ranging from generative AI and cloud infrastructure to next-generation electronic devices.”
The company estimates production of the chips in as early as five years.
What else you need to know: IBM is one of the legacy companies that has been in recovery mode after shares of the tech firm were caught up in the software sector sell-off earlier this year.
Earlier this week, JPMorgan analysts upgraded the stock from Neutral to Overweight, with analyst Brian Essex noting the company’s software business continues to “drive better recurring revenue, margins, profitability, and cash flow.”
On Monday, IBM announced it has partnered with OpenAI (OPAI.PVT) to launch a new, secure application service that “would bring advanced AI capabilities into security operations to help enterprises counter machine-speed threats.”
The company has also made strides across its hardware initiatives, including quantum.
Last month, IBM stock surged after the Department of Commerce said it would contribute $1 billion to launch Anderon, a new standalone company to create a quantum chip foundry in Albany, N.Y. Meanwhile, IBM will also put $1 billion of its own cash into Anderon.
IBM, long known for its mainframe computers, has been on an acquisition spree in recent years as it positions itself as a hybrid cloud software provider through deals such as Red Hat in 2019, HashiCorp last year, and, most recently, Confluent.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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