International Business Machines (IBM) has been a long-time investment for many, following Warren Buffett into the stock with Ginni Rometty as CEO. The company focused on buybacks instead of research and development, falling behind competitors like Google and Microsoft in innovation.
In the 2023 annual report, IBM’s primary business includes hybrid and cloud software solutions, consulting, and computing infrastructure. Revenue growth has suffered since 2010, but in the last 3 years, there is hope for a turnaround with quantum computing and AI technologies.
IBM is developing quantum computing technology, potentially unlocking new possibilities in energy and biotech. They have the largest functioning quantum computer called Condor. The company also offers AI cloud services, partnering with major players like AWS, Microsoft, and SAP.
Based on a valuation model, IBM appears to be undervalued if revenue and owner earnings continue to grow. The company has a solid dividend yield of 3.77% and is focused on preserving capital for growth instead of buybacks. The balance sheet shows more long-term debt than cash, a result of past acquisition strategies.
CEO Arvind Krishna, a long-time IBM employee, took over in 2020 and has led the company through a revenue turnaround. With a focus on quantum computing and AI technology, IBM is poised for growth under his leadership.
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https://seekingalpha.com/article/4702694-ibm-quantum-computing-growth-and-dividends