Exxon Mobil Corporation (XOM), International Business Machines Corp. (IBM): Investing in the Next Ten Years of Technology and Energy

What to expect

Analysts on a consensus basis anticipate the solar industry to grow earnings by 9.48% in fiscal year 2013. In comparison, Exxon Mobil Corporation (NYSE:XOM) missed analyst expectations by 18.4% in the second quarter. The miss on earnings came as a result of falling oil demand.

Exxon Mobil Corporation (NYSE:XOM) responded to falling demand by cutting back on its operating costs. Going forward (ten years into the future), we can only imagine the amount of impact full-electric vehicles could have on the company. I don’t think Exxon Mobil Corporation (NYSE:XOM) is adequately equipped to handle the problem, and its fixed costs and long-term debt could come back to haunt it.

Exxon Mobil Corporation (NYSE:XOM) may have to depend on its natural gas business, but with solar costs drastically falling, maybe the upstream market for dirty-energy will become technologically obsolete. The scale of solar installation may improve beyond our current expectations, and could be a larger component of the energy mix depending on production and efficiency gains. The demand for clean energy is very real as it’s becoming clear as day that pollution is a key threat to long-term prosperity.

Cloud

International Business Machines Corp. (NYSE:IBM) beat earnings this past quarter by 3.70%. The company’s business is starting to stabilize because it’s shifting its focus away from hardware and into software and services.

International Business Machines Corp. (NYSE:IBM) believes that the future of decision making is going to be about big-data. Big-data is the process of accumulating large amounts of data, and being able to find patterns in the data that may lead to better decision making.

When people think of the cloud, there are many ideas on what the cloud is. But one of the biggest trends in the cloud today is the software-as-a-service side of the market. Many of you are probably already familiar with it. But it’s basically web based programs that can be purchased through a subscription.

Anything that can potentially be automated will be. Anything that can be analyzed will be. In order to analyze, you need data, and in order to automate you need computers. The two go hand in hand. Execution through automation and decision making due to having better sources of data will lead to higher rates of profitability.

Eventually, more advanced artificial intelligence will hit the market. The idea of androids walking around is leery at best. Programming language is becoming better and will become more fine-tuned to follow human logic and reasoning skills. The idea of web 3.0 (semantic web) is to allow programming logic (computer logic) to better interpret and understand human logic. The idea is that human logic is more complex than programming logic, and to make programs more adaptable to the environment is key in making sure computers are able to follow human requests. If humans can request a robot to do more complex commands, the future potential for non-human labor may be near limitless.