IBM Is America’s Worst Big Tech Company
IBM's CEO calls it a triumph of disciplined execution and transformative AI, but the numbers behind that spin reveal a company that has fumbled nearly every major shift in tech for the past fifty years and keeps falling further behind.
Every quarter, IBM (NYSE: IBM) | IBM Price Prediction CEO Arvind Krishna says IBM is doing great. Every quarter, investors are reminded that what was the greatest American tech company for decades had its chance to stay great. Krishna and his immediate predecessors squandered that opportunity with a single-digit revenue increase and technology that lags virtually every one of its larger competitors.
As IBM released quarterly figures, Krishna commented, “Disciplined execution throughout the quarter drove accelerated revenue growth and strong free cash flow. Our clients are now deploying Super Intelligence in ways that transform entire operating models, instead of simply addressing narrow or novel problems. IBM’s technology and expertise are helping organizations drive growth and serve customers with greater speed, precision, and efficiency than ever before.” In reality, revenue rose a paltry 5% to $17.1 billion, dwarfed by companies like Microsoft (NASDAQ: MSFT), Meta (NASDAQ: META), and Alphabet (NASDAQ: GOOG). IBM’s net income for the quarter was $2.2 billion, up from $1.7 billion last year. Nvidia’s (NASDAQ: NVDA) net income in the last quarter was $60 billion.
In its most recent quarter, Microsoft had revenue of $90 billion. It had net earnings of $36 billion.
Going back to 1993, IBM was the fourth largest company in America, behind only GM, Ford, and ExxonMobil. It was ahead of GE, which is considered the best-run company in the second half of the last century. Last year, IBM ranked 66th, based on the Fortune 500.
Nothing tells Wall St.’s view of companies in the same sector as market cap. IBM’s is $237 billion. Microsoft’s is $4 trillion, and Alphabet’s is about the same.
What happened to IBM, really? It missed out on leading in PCs, smartphones, operating systems, cloud computing, AI, e-commerce, and search. In essence, it missed out on every major tech advance in the last half-century.
IBM will never be a tech leader again. In fact, it continues to fall behind.
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