Will Acquisitions, New Business Initiatives Drive Long-Term Growth At IBM?

▤ Summary

Now, with the company having undergone a long and massive restructuring and putting a new chief executive at the helm, is IBM stock a buy? This includes $29 billion in capital expenditures, for things like scaling its cloud operations and artificial intelligence offerings and bolstering security and services capabilities. It spent $45 billion on research and development, focusing on building its cloud and cognitive offerings, as well as blockchain technology and quantum computing. "Unlike prior leaderships focus on earnings and cash flow, Arvind is clearly more focused on revenue growth, which better aligns with what drives investor sentiment and valuation multiples," Morgan Stanley analyst Katy Huberty wrote in a note to clients following the earnings report. "That said, we dont see noticeable changes to the portfolio before the economy stabilizes, making the return to sustainable growth at IBM a multiyear journey," she said.

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