International Business Machines Corporation IBM recently announced that L'Oreal has opted to deploy its state-of-the-art generative artificial intelligence (AI) technology solutions to enhance its cosmetic formulation processes. By combining its deep expertise in cosmetic science with IBM's advanced technology, the world’s leading beauty company is set to develop a custom AI foundation model to uncover new insights that will drive the development of more sustainable beauty products while reducing material and energy waste in production processes.

Digging Deep Into IBM-L'Oreal Collaboration

IBM is leading the way in applying AI models to areas such as chemistry, time series and geospatial data, making them ideal for cosmetic formulation research. By combining IBM’s cutting-edge AI technology with L'Oreal's deep expertise in cosmetic science, the collaboration seeks to accelerate scientific discoveries that will drive ecologically responsible and innovative solutions. 

A key focus of the partnership is to explore the use of renewable, sustainably sourced raw materials in cosmetics, supporting L’Oreal’s “L'Oreal for the Future” sustainability initiative. This initiative is dedicated to meeting its goal of sourcing the majority of its product formulas from bio-sourced materials and implementing circular economy practices by 2030. 

In addition to boosting product development, the new AI-driven model will provide 4,000 L'Oreal researchers worldwide with cutting-edge tools for optimizing large-scale production. Furthermore, IBM Consulting will assist the company in rethinking and redesigning the formulation discovery process. By gaining a deeper understanding of how renewable ingredients behave within cosmetic formulas, L'Oreal aims to build more sustainable, inclusive and personalized product lines that cater to diverse consumer needs around the world.

Does IBM Stock Stand to Gain From the Collaboration?

IBM is betting big on the Watsonx platform, which is likely to be the core technology platform for its AI capabilities. This enterprise-ready AI and data platform comprises three products to help organizations accelerate and scale AI – the watsonx.ai studio for new foundation models, generative AI and machine learning; the watsonx.data fit-for-purpose data store, built on an open lake house architecture; and the watsonx. governance toolkit to help enable AI workflows to be built with responsibility and transparency. 

The company is poised to benefit from the strong demand for hybrid cloud and AI, which will drive growth in Software and Consulting. Its growth is expected to be driven primarily by analytics, cloud computing, and security in the long haul. This collaboration will further strengthen IBM’s reputation for delivering innovative solutions across AI and consulting services and improve its revenues in the upcoming quarters. An improved financial performance will likely propel the stock upward.

IBM Stock Price Performance

Shares of IBM have gained 30% over the past year compared with the industry’s growth of 1.5%.

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IBM’s Zacks Rank and Stocks to Consider

IBM currently carries a Zacks Rank #4 (Sell). 

Some better-ranked stocks in the broader industry have been discussed below.

Ubiquiti Inc. UI presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Its effective management of a strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques. In the last reported quarter, Ubiquiti delivered an earnings surprise of 20.9%.
 
InterDigital, Inc. IDCC sports a Zacks Rank of 1 at present. It has a long-term growth expectation of 17.44%.

IDCC pioneered advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops various advanced technology solutions for digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.

Workday Inc. WDAY carries a Zacks Rank #2 at present. In the last reported quarter, it delivered an earnings surprise of 7.36%. 

WDAY is a top supplier of enterprise-level software solutions for the fields of human resources and finance management. The company's cloud-based platform makes it simpler for businesses to offer analytical insights and decision support by integrating finance and human resources into a single system.

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