Kim BoltonIBM Common StockIBMHOLDFeb 21, 2024

Still likes it despite pullback. Recent weakness partially due to customers delaying (but not cancelling) large purchases in favour of buying hardware. AI, mainframe modernization, and quantum still provide potential growth engines.

His nemesis. Many see it as a potential beneficiary of the AI boom and quantum computing. For a company with a $200B market cap, he doesn't have the stomach for it's being so volatile. Attempts at making a new high have all failed, made 3 lower lows. 

The executives and board own few shares, which is a negative in his book. Warren Buffett once owned this and was disappointed. Google and Meta are better for large tech.

He trimmed it and will sell the rest. Their earnings were so disappointing. Quantum computing is a long-term goal for them and he could revisit it later. 

They transition from hardware to services and software. The stock ran up on the hype leading the earnings, but then that enthusiasm vanished. Any revenue miss impacts earnings and sentiment. IBM is interesting in the long term, but IBM has been considered dead money in the past. You get a decent dividend and management is good.

Their last earnings had one of the largest gaps ever in their history which could signal further problems in the company. Wait to see them sort out of their problems. Would not buy this dip.

We had these stocks that were growing off of AI, and they've been delivering spectacular growth. But they've also had spectacular increases in share prices, which becomes a potential source of volatility. 

The question is whether valuations are too high given projected growth? As we've seen here, some of the price adjustments can be pretty abrupt.

Previous support was just taken out. It could keep falling. Maybe it will consolidate.

Is -18% from highs and trades at 18x PE. They create mission-critical software.

Has done better than peer consulting companies. Chart appears to be rolling over. But in his industry, "nobody ever got fired for buying IBM".

It's a screaming buy, down 17% this year. Trades at 20x forward PE. Then, there's quantum computing, which has a $1.3 trillion addressable market from now to 2030. The CEO has done a great job. 

Big into AI, huge into quantum. Checks all the boxes. Last earnings (April 22) were a bit of an execution slipup. He has a full position right now (4.5%). Buy here, add around $270, and again at $255. Yield is 2.43%.

There's such a backlog in the data centre build that we're seeing a huge boost in earnings and net income. After its recent run, this will keep going, but at some point the music will stop, though not anytime soon. Would buy only a tranche now then buy more during a dip.

It was doing well, rising above $300, the past year, but is now consolidating around $240. If it continues here, it will go sideways. Falling below $235 is not good, while rising past $350 is encouraging.