IBM: Never Mind The Cloud, Here Is What Should Excite Investors

When I last covered International Business Machines (NYSE:IBM), I made the argument that while the company is inherently riskier than competitors such as Microsoft (NASDAQ:MSFT), IBM could have significantly more upside as a result of growth in its cloud business, along with an attractive valuation.

In price terms, IBM stock has continued its decline since my last article:

In hindsight, my forecasts that IBM would grow simply by virtue of growth in its cloud business, along with an attractive valuation, may have been erroneous. The cloud has become a highly competitive space in the technology space, and as it becomes increasingly commoditised, margins are likely to shrink over time. Therefore, growth in IBM’s cloud business alone will not necessarily be sufficient to propel the company’s growth long term.

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