IBM announced that global energy company BP has joined the tech giant’s quantum network as an industry partner to boost the use of quantum computing in the energy industry.
IBM quantum network is a community of more than 130 members, who advance the development of quantum computing and explore practical applications.
The partnership will give BP access to IBM’s (IBM) quantum expertise, software and the most advanced quantum computers through the cloud. It also includes a premium 65 qubit quantum computer which is the largest universal quantum system in the industry at present.
Notably, IBM is targeting a 1,000 plus qubit system by 2023 end. The two companies will explore the use of quantum computing to address business and engineering challenges and develop potential applications to drive efficiencies and reduce carbon emissions.
Quantum computing can be used in diverse areas such as modelling chemistry and build up of clay in hydrocarbon wells, analyzing fluid dynamics in wind farms and optimisation of autonomous robotic inspection of facilities.
By the end of 2030, BP seeks to achieve about 50 gigawatts of net renewable energy capacity and reduce its oil and gas production by 40%.
Dario Gill, senior vice president and director of IBM Research said, “The energy industry is filled with opportunities to see value of quantum computing use via discovery of new materials that can improve generation, transfer as well as storage of energy.” (See IBM stock analysis on TipRanks).
Morgan Stanley analyst Kathryn Huberty on Jan. 22 reiterated Hold rating on IBM stock with a $140 price target implying 16% upside potential.
Huberty noted that a shift to shorter duration deals raised questions if customers are willing to commit to the company’s products over a longer timeline.
The analyst believes a change in software growth trajectory is essential to build investor confidence for sustainable revenue growth over a longer term for the company.
The rest of the Street remains cautiously optimistic about the stock with a Moderate Buy consensus rating based on 2 Buys and 3 Holds. That’s with an average analyst price target of $137.25, implying 14% upside potential from current levels.
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