Reportedly, International Business Machines Corporation IBM CEO Ginni Rometty has expressed her intent to create 25,000 job opportunities for U.S. citizens and invest $1 billion over a span of four years for the same purpose. The announcement comes ahead of the meeting between technology leaders and Donald Trump scheduled to be held today in New York.

Notably, Rometty will be joined by other industry leaders such as Sheryl Sandberg of Facebook FB, Eric Schmidt and Larry Page from Alphabet GOOGL and Jeff Bezos of Amazon AMZN at the meeting that will emphasize on improving the state of jobs in the U.S.

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Why this Move?

Right from his election campaign days, Trump has been vocal about scrapping of trade deals that took jobs away from the U.S. as well as keeping imports under check through the imposition of tariffs.

Technology companies seem to be increasingly focusing on creating jobs as well as investing generously in the U.S. ahead of the meeting with Trump (the plan was already in place even before Trump was elected).

The main objective behind doing so is to be on the safe side and avoid any criticism for outsourcing jobs to other nations.

What this Means for IBM?

Rometty notes that with the increasing adoption of technologies such as cloud computing and data science, there is good demand for skilled workers who need not have an advanced degree in technology. Rather government initiatives in vocational training and education will help to bridge the distance between the workforce and the job at hand.

As per an IDC report, worldwide spending on public cloud services is estimated to reach $195 billion by 2020, which is currently growing at a CAGR of 20.4%. Not surprisingly, the job market related to the sector is also likely to benefit in the coming years.

While the company does spend considerable resources in preparing its employees to adapt to the emerging sectors such as cloud computing, artificial intelligence and cybersecurity, a little help from the government in the form of vocational training institutes would be much appreciated by Big Blue.

Stock Performance Overview

Notably, shares of IBM have underperformed the broader Zacks Computer Integrated Systems industry on a year-to-date basis. While the industry generated a return of 29.3%, the stock returned 20.3%.

The underperformance of the stock could be due to sluggish IT spending particularly on on-premise and data center hardware and foreign exchange volatility. Moreover, intensifying competition in the cloud remains a major concern for the company. However, IBM's strategic growth initiatives, including its Big Data & business analytics, cloud computing, mobile and social business are expected to drive growth in the coming quarters.  

Zacks Rank and Key Picks

At present, IBM carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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