IBM (NYSE:IBM) has seen its share price remain relatively stable this year, up 2% since 2024 but trailing behind the S&P 500 and Nasdaq. However, compared to a decade ago, IBM shares are trading 20% lower, indicating a long-term decline for the company. Despite various efforts to reverse this trend, including recent acquisitions like HashiCorp for $6.4 billion, IBM’s performance has not shown significant improvement. The HashiCorp acquisition, aimed at enhancing IBM’s earnings in the future, was met with investor skepticism, resulting in a 9% drop in IBM shares. This purchase follows IBM’s acquisition of Red Hat for $34 billion in 2019, which also failed to deliver the expected financial benefits.
IBM reported disappointing first quarter financial results alongside the HashiCorp acquisition announcement, with revenue falling short of expectations at $14.46 billion versus the anticipated $14.55 billion. While IBM’s earnings per share of $1.68 beat analyst forecasts, revenue from software sales and information technology consulting both fell slightly below expectations. Currently, 14 professional analysts have a consensus “hold” rating on IBM shares, with only five rating it as a buy.
Once a leading technology stock in the 1970s and 1980s, IBM has struggled in recent years and is no longer a top performer akin to NVIDIA. The company’s stock price has faced challenges for over a decade due to unsuccessful acquisitions and turnaround efforts. As a result, it is advisable to avoid investing in IBM at this time. Joel Baglole, a seasoned economic journalist, recommends steering clear of IBM stock given its lackluster performance and uncertain future in the technology sector.
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https://investorplace.com/2024/06/ibm-stock-alert-why-investors-should-avoid-this-tech-laggard/