IBM, one of the oldest software companies in the world, has a rich history dating back to 1911. Despite its age, IBM has consistently delivered returns to its shareholders, earning the title of “Dividend Aristocrat” for its reliable dividend payments. The company has a low valuation compared to its peers, with a below-average price-to-earnings ratio.
However, IBM has faced challenges in recent years, with slow revenue growth and negative free cash flow hampering its performance. The company has been divesting parts of its business to free up cash for potential acquisitions, aiming to reduce operating expenses and increase revenue.
One of IBM’s strengths lies in its history of AI advancements, from the chess-playing robot Deep Blue to the natural language processing AI Watson. The company’s latest project, Granite, aims to democratize generative AI by offering an open-source platform for developers to build and share AI models.
IBM’s potential lies in its ability to capitalize on these strengths, but the market remains skeptical about its growth prospects. While the company has the assets and capacity to succeed, it has yet to demonstrate clear signs of growth.
In conclusion, IBM is a sleeping giant in the technology world with long-term potential. While it may not be a top choice for investors at the moment, it should not be counted out for its ability to leverage its strengths and capitalize on future opportunities.
Article Source
https://seekingalpha.com/article/4702439-ibm-is-a-sleeping-giant-can-it-wake-up
