Is IBM Stock a Buy?
Is IBM a bargain or a value trap? The numbers point to a cheap stock with a 3% yield.
International Business Machines (NYSE: IBM) stock has been underperforming recently. The tech giant's shares fell by 2% in October and 22% over the past quarter. IBM's current stock price corresponds to low multiples of its sales and cash flow, typically associated with slow-growing retailers rather than innovative technology companies.
In stark contrast, major tech firms are heavily investing billions in AI data centers and competing for consumer attention. Meanwhile, IBM remains relatively stable, as it already possesses mainframes and Linux machines that operate for major banks. Although these businesses follow a cyclical pattern, with this quarter being a slower period, it does not pose a significant crisis.
On the positive side, Red Hat's OpenShift experienced a 29% growth, and IBM's distributed infrastructure sales increased by 37% year-over-year. Surprisingly, IBM's stock price plummeted in July following the release of record results.
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