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International Business Machines Corp. (NYSE: IBM) has “recovered” from years of decline under CEO Ginni Rometty (2012 to 2020). She presided over quarter after quarter of falling revenue. Under new CEO Arvind Krishna, revenue growth has returned. However, once one of the world’s largest companies and owner of among the world’s greatest brands, IBM has become a third-tier tech company.
In the most recent quarter, revenue rose 6% to $14.1 billion. IBM lost $3.2 billion. Compare that to Apple, which made $19.4 billion in net income during its most recent quarter, on revenue of $83.0 billion.
IBM always has obscured the size of its cloud revenue, based on how it shows up in the P&L statement by division. It said “hybrid cloud” revenue was $22.2 billion over the past 12 months, or about $5 billion a quarter. Amazon’s AWS cloud operation had almost $20 billion in revenue in the most recent quarter.
IBM’s current market capitalization is $110 billion, well short of Apple’s $2.31 trillion, Microsoft’s $1.76 trillion and Amazon’s $1.17 trillion.
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In the most recent Kantar Global Brands list (2022), the Apple brand was worth $947 billion. Amazon was worth $706 billion and Microsoft worth $611 billion. But IBM was worth $97 billion, just ahead of Instagram at $92 billion.
In 1970, IBM ranked fifth on the Fortune 500. Last year, it ranked 49th.
IBM’s stock price has fallen 20% in the past five years. The S&P 500 is up 44%, and Microsoft is 200% higher.
IBM has become an afterthought in the tech world. It does not stand out in any category. Those things will not change.
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