Shares of International Business Machines Corp, commonly known as IBM, have been a popular pick among investors. Institutions' substantial holdings in IBM imply that they have significant influence over the company's share. Therefore, it is crucial for investors to know the key factors that may affect IBM's stock performance.
IBM has recently been on Zacks.com's list of the most searched stocks. Therefore, investors may want to consider some of the key factors that could impact IBM's stock price.
Firstly, IBM has been working on artificial intelligence (AI) for four decades and has one of the highest dividend yields in the tech sector. The company has been investing heavily in AI, and its Watson platform is widely used in various industries. However, IBM's revenue has been declining over the past few years, and this has been a concern for investors.
Secondly, millions of workers worldwide will lose their jobs to AI over the coming years, and IBM says it has a program that can help. The company's AI-powered platform, Watson Talent, helps businesses find the right candidates for the job, and it also helps employees acquire new skills.
Thirdly, back in 2011, Warren Buffett's Berkshire Hathaway bought a 5.4% stake in IBM at an average price of $170 per share. However, the investment has not performed well, and Berkshire Hathaway has since sold most of its shares in IBM.
Fourthly, IBM has been facing legal issues, including a recent case in which Ian Clifford sued the company for not raising his salary in a decade. However, the employment judge dismissed the case, stating that IBM had not discriminated against Clifford.
Lastly, the COVID-19 pandemic has affected IBM's business, like many other companies. IBM Chief Executive Officer Arvind Krishna said the company expects to pause hiring for roles it thinks will become less relevant due to the pandemic.
In conclusion, IBM's stock has been a popular pick among investors, but there are several key factors that investors should consider before investing in the company. This includes IBM's focus on AI, declining revenue, legal issues, and the impact of the COVID-19 pandemic on the company's business. As always, investors should do their due diligence and research before making any investment decisions.
