IBM Face Decline in Share Price Continuously for Five Years and it Continues with this Quarter.


IBM is a well-known tech giant in existence for more than 100 years, is facing difficulties in maintaining balance in the stock market. The decline in the share price continues consecutively for five years with this quarter when the revenue earnings have declined from $18.39 billion to $18.16 billion against a gain of 1 percent in earnings per share from $2.35 to $2.38. IBM is facing difficulties in coping up with the continuous changes in the technological environment. Their entrance in the Artificial Intelligence and Cloud computing world has been facing a lot of challenges to sustain in the technological markets against their competitors.

IBM’s Chief Financial Officer Martin Schroeter is still confident about the expected turnaround in the company’s revenue in future as the company is trying to avoid the previous mistakes and taking the time to analyze the businesses where they would be investing. For that matter, IBM has made some strategic changes to their investments and diverted $1.53 billion in research and development in 2016. This diversion of funds is expected to show the desired results in the forthcoming quarters.

There are some more strategic changes in regards to investments in Cloud, Analytics, Mobility and Security businesses which seems to be beneficial compared to the previous year. These strategic changes in investments helped IBM to generate $7.8 billion with an increase by 12 percent and the cloud business succeeded to grew by 33 percent generating $3.5 billion. During the conference, IBM declared that they are expecting better revenue numbers in the second quarter where they have a new product line to be launched, acquisition formalities from the previous year to be completed and big contracts which would be completed soon.

Another business which looks to generate better revenues for IBM is the cognitive computing technology known as Watson. In this section, the company has applied Artificial Intelligence in the Pharmaceutical sector and their acquired company– The Weather Company, has tied up with Samsung and Lyft. Investing in the Cognitive solution sections earned better revenue for the company in the last quarter with $4.1 billion and 2 percent increase. The Presidential announcement to hire more Americans has also affected the hiring strategy of the company and hence they have committed to hiring 25,000 US employees in the next four years.

Among all the investors who have invested in IBM, Berkshire Hathway has been the loyal one who paid $170.43 per share. Currently, IBM is happy as they managed to return $2.6 billion to their loyal shareholders in the form of the dividend in the first quarter.