International Business Machines Corp. (NYSE:IBM) may be aching from its performance this year but CNBC’s Josh Lipton wonders whether 2015 will be better for the company.
Big Blue was, in fact, the worse performer of the Dow Jones Industrial Average in 2014 losing 15% of its value. According to Lipton, one of the biggest faults of International Business Machines Corp. (NYSE:IBM) in the past year was its obliviousness to how disruptive cloud technology could be to its businesses.
Peter Wahlstrom, Morningstar Senior Technology Analyst, is quoted by Lipton saying that cloud technology has enabled smaller companies to be more agile with lesser need for infrastructure and offering less cost to clients to compete in the marketplace with International Business Machines Corp. (NYSE:IBM).
However, Lipton said that International Business Machines Corp. (NYSE:IBM)’s CEO, Virginia Marie Rometty, is again transforming her company by organically growing IBM’s cloud business. She is also growing this business through acquisitions, Lipton said.
“IBM now expects to generate at least $7 billion in cloud revenue by 2015,” Lipton added.
Furthermore, he noted that bulls on the IBM stock point to other reasons why 2015 may just be the year of Big Blue. One of those reasons is just how inexpensive the company’s stock is.
Though industry observers note that the number of analysts rating IBM stock a “Buy” is at a 20-year low, this may be “contrarian indicator,” Lipton said.
Nonetheless, the question remains whether Rometty will be able to pull off another transformation of this iconic company, the CNBC reporter noted.
Warren Buffett’s Berkshire Hathaway is the largest institutional investor in International Business Machines Corp. (NYSE:IBM) with about 70.48 million shares in the company by the end of September.