International Business Machines Corp. (IBM) Is Making the Right Moves

I think it would be wise to stay the course with Amazon.com, Inc. (NASDAQ:AMZN). The company’s growth in international markets is somewhat bottle-necked due to issues with Internet saturation, a lack of merchant platforms in certain markets, and global economic sentiment. All of these factors are temporary, meaning that the company could surprise on cash flow, revenue, and net income growth in future accounting periods. Going forward analysts expect Amazon to generate 37.15% in earnings growth on average over the next five years.

Conclusion

I think International Business Machines Corp. (NYSE:IBM) is on the right track, and the company should be able to meet its $20 earnings per share target. This may involve declines in revenue growth from the systems technology group. But this might be a good thing; perhaps the cloud and IBM’s range of software, services, and data solutions will have a higher contribution to net income, and a lower contribution to revenue. I am doubtful that analysts would punish IBM’s growth in net income, even if it involves a minor sacrifice on top-line revenues.

Technology can be a volatile place, but I believe Hewlett-Packard Company (NYSE:HPQ) and Amazon.com, Inc. (NASDAQ:AMZN)should be included in a technology portfolio. In addition to the potential increase in returns on investment, this could offset some of the risk associated with International Business Machines Corp. (NYSE:IBM).

The article IBM Is Making the Right Moves originally appeared on Fool.com.

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