IBM must show restless investors that its cloud strategy is working

IBM may be one of the most iconic American technology companies, but Wall Street no longer views Big Blue as an innovator in a tech landscape dominated by the likes of Amazon, Apple and Google owner Alphabet.

Shares of IBM (IBM) have fallen 12% in the past five years, as stocks of software giants like Microsoft (MSFT) and Salesforce (CRM) have each soared more than 200%.

IBMEven Warren Buffett gave up on IBM, despite its dirt cheap valuation and gigantic dividend. His Berkshire Hathaway (BRKB) bought a stake in IBM in 2011 and sold it in 2018 at a loss. Apple (AAPL) is now the Oracle of Omaha’s preferred tech stock, and Berkshire owns nearly 249 million shares of Apple, a 5.6% stake in the company.

IBM’s underperformance is particularly frustrating since the company has a growing presence in cloud computing, thanks largely due to its $34 billion acquisition of Red Hat in 2018.

There has even been chatter over the past few years about the possibility of some activist investors looking to buy a stake in IBM in order to shake things up at the company.




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