IBM (NYSE: IBM) made a quiet new high on December 10 as the buzz
over its smart grid positioning starts to build.
Chart Courtesy of StockCharts.com
The smart grid may be where two important "greens" meet, the
green of environmentalism, and the green of big bucks. And somewhere
along that green road, IBM may have a lot of toll booths. That's
why the stock has been so strong of late.
Investors are starting to get that gleam in their eyes not seen since the early
days of the "dot.com" boom days, as the potential for the next big thing is starting
to grow.
To be sure, we've heard this kind of talk before. At some point in the "dot.com" boom
days, we were supposed to have our appliances monitored for energy efficiency
and functioning level on the web and companies were going to make money doing
the monitoring. That never really panned out.
But the smart grid has a broader appeal as its promise of energy efficiency gives
everyone at any level of the political and economic spectrum something to feel
good about. And IBM is the early leader, at least at the industrial level, as
it has multiple projects under way already.
When this thing takes hold, it's supposed to transfer electricity from areas
that have a surplus to areas that need it. The bottom line is to lower energy
usage and to decrease costs by increasing efficiency. If this works, then the
world will be a nicer place and our energy resources will last longer.
O.K., that's a lot to ask for, and it may never pan out at that level. But, on
an investment level, it's starting to get a buzz. The potential for spreading
is also there, as more stuff will have to be built, such as power lines, more
computers and related technology. And that means more jobs for engineers and
construction types.
Someone's going to have to manage those new server farms too, which means technical
and even janitorial jobs. The issue, though, is where are those jobs going to
be created. IBM is building several technology centers at the moment. Many of
them are related to their cloud computing initiatives. The problem is that the
new centers are in India, New Zealand, and Asia.
That means that the smart grid may be more profitable, at least at the grass
roots level, for other countries, instead of the U.S. Nevertheless, IBM is getting
a 5-star rating.
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