International Business Machines Corp. (NYSE:IBM) remained unchanged in the market having mapped another 12th straight quarter of falling revenues much to the suggestions of the Street that the stock has found a key support level at the current trading levels. CNBC’s contributor, Steve Grasso, believes the worst might be over for the IBM as the company continues to shed unprofitable business with firm focus on high-margin businesses.
Pete Najarian believes it is a step in the right direction as International Business Machines Corp. (NYSE:IBM) continues to transition from low-margin businesses straight into high-margin businesses like cloud computing and data analytics. CEO Virginia Rometty has been under immense scrutiny in the recent past from top shareholders who are calling for a major shake-up, to rejuvenate growth.
“The move is to other areas of growth; right now she is trying to execute her best. I think IBM is doing the right things the right steps, they have had to move to this direction. They were slow to do it just like Intel Corporation (NASDAQ:INTC) was, just like Microsoft Corporation (NASDAQ:MSFT) was. I do think they are executing now and I think they are doing a very nice job,” said Mr. Najarian.
International Business Machines Corp. (NYSE:IBM) future depends on the outcome of its investments in the fields of data analytics; cloud computing and mobile apps for corporate customers as traditional hardware business continue to erode in terms of growth.
Lower earnings in the recent quarters has already forced International Business Machines Corp. (NYSE:IBM) to cut back on its repurchase program a trend that might persist in the coming months as Grasso affirms change might not come as fast as many people expect. The stock has also been stuck in the $150-$165 range in the recent months, calling for big news if it is to climb above the current levels, according to Dan Nathan.
“I know that the cloud revenues were up, and they are probably like 5% of total sales, they are really not moving the needle right now. To me I think the stock is probably stuck in a range a lot of people were looking at that gap and saying the slightest bit of good news you may fill that in, but it doesn’t seem to be getting there on what they delivered today,” said Mr. Nathan.
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