Stock price when the opinion was issued
It sank 6.6% right after earnings. The market got it wrong--this is a buy opportunity. After a lost decade, they returned to growth a few years ago. They spun off their legacy business and doubled-down on their Red Hat division, essential for AI. Rallied 34% last year, and held up even when AI corrected. YOY revenue was +2%, software +7%, consulting -2% and infrastructure -6%. Bountiful cash flow, though. Also, the reiterated full-year guidance. The quarter and business are good.
This is the next phase. We've been in this AI growth patch for a while now, which won't end, but quantum is the next level. It answers a lot of the problems that we deal with in the world such as medical issues and cybersecurity.
Problem is, not a lot of developed companies in the space. The industry is quite immature, but sometimes (if you have a longer time horizon) that's where you find opportunities for decent, long-term growth. Unlike AI, quantum needs a lot of space (perhaps it could solve office realty issues). IBM is starting to look more prominent in that space.
Good part is that it's part of quantitative computing, and this is where the stock can rally in the next 5-10 years. Doesn't feel it can put enough money in to become one of the leaders in that area. That's why he owns MSFT.