Why Wall Street Is Completely Wrong About IBM

IBM stock has performed poorly over the years as the company's two key metrics - revenue and free cash flow - stagnate. That's all water under the bridge as IBM has reinvented themselves now with (checks notes) yet another pivot into AI. IBM's AI creation Watson is now watsonx, and that subtle name change is supposed to make us forget about the Watson Health disaster. Based on comments in the latest earnings call, generative AI and Watson brought in $400 million in revenues last quarter, but that will be recognized over 12-24 months. In the meantime, the "Data and AI" revenue segment grew just 5% last year. IBM is no AI stock, but they are forecasting $12 billion in free cash flow next year which saw their share price hit 10-year highs. Now maybe they can start growing that dividend a bit more than just the paltry 1.3% we've seen over the past 5 years. Here's to hoping we're wrong about IBM's AI success story being all dough and little show.

RESEARCH PIECES USED IN THIS VIDEO:
1. IBM and Red Hat – WTF is a Hybrid Cloud?
https://www.nanalyze.com/2018/10/ibm-...
2. Investing in Cloud Computing. Any Growth Left?
https://www.nanalyze.com/2023/04/inve...
3. Making IBM Great Again With Artificial Intelligence
https://www.nanalyze.com/2020/07/ibm-...
4. What Do IBM Mainframe Computers Look Like Today?
https://www.nanalyze.com/2017/10/ibm-...
5. IBM Stock Review | Finally a Turnaround
   • IBM Stock Review | Finally a Turnaround  

CHAPTERS:
00:58 Is IBM growth or value?
02:52 IBM's two key measures of success
03:45 How safe is IBM's dividend?
05:29 The Watson Health disaster
06:59 IBM emerges as an AI stock.
09:04 Consulting or Enterprise AI SaaS?
11:18 Concluding thoughts on IBM
12:21 A better dividend tech stock

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