Can Cloud Save International Business Machines Corporation (IBM) Stock?


In early October, Goldman Sachs analyst James Schneider reiterated his “Neutral” rating for the International Business Machines Corporation (IBM). The analyst said the stock is expected to remain capped even though he was expecting a “solid quarter.” But IBM reported a mixed quarter a few days later. The company reported EPS of $3.42 versus the Street’s forecast of $3.40, but revenue in the period came in at $18.76 billion, vs. $19.10 billion as expected by analysts.

IBM’s Technology Services and Cloud Platforms unit, which remains the biggest in terms of business, touched $8.3 billion in revenue. But that revenue shows a 2% YoY decline. Analyst had expected the unit to report a revenue of $8.43 billion. Despite the bleak numbers, IBM is slated for growth as the company is making a tangible progress in Cloud and mainframe businesses. Investment firm recently said in a report that IBM return to revenue growth in the second half of 2019.

On November 16, International Business Machines Corporation (IBM) said it extended its partnership with ServiceNow. ServiceNow is a software services and solutions company that helps enterprises simplify the management of their IT resources across multiple cloud environments. The company uses IBM’s Multicloud Management Platform with ServiceNow’s IT Service Management and IT Operations Management Solutions.

In the third quarter alone, IBM signed Cloud deals with 3 big companies. Canadian insurance company Economical Insurance said it will use IBM Cloud platform to streamline its business. Similarly, oil giant ExxonMobil said it will use IBM Cloud services for its app. The third big company to start using IBM Cloud service was Novis.

Jim Cramer and famous stock trader Larry Williams think IBM is a “Buy” based on their technical analysis. Both the experienced analysts studied technical charts of IBM stock in a program on CNBC and said that the stock is a suitable investment opportunity.

Recently, there has been a lot of insider activity for IBM stock. In November, three executives, including IBM CEO Ginni Rometty bought shares of the company. In a lot of cases, insider buying is a good indicator for stocks.

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Author does not have investment in stock discussed in this article.

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