Thread regarding IBM layoffs

Shout out to @qr+1jy1fmgxg and @g0+1jy1fmgxg David L has recently stepped up his posts on LinkedIn

@ry I believe it’s safe to assume a 60% increase in system Z sales for its introduction quarter. It’s also safe to assume a 90% increase in system Z sales year over year for the first full quarter of system Z17 sales. Net net 11 bucks per share are within reach given current course and speed. NOTE tariffs and their retaliation could easily upset the apple cart

@qm+1jy1fmgxg Valid point about trailing vs forward earnings. But not sure I believe we'll see FY2025 EPS of $11. Like the 5-6% Revenue growth guidance, it's assuming a monster 2H due to Z17. We'll see. All this stuff seems like a repeat of Roadmap 2015 to me - people making assumptions in a spreadsheet that can't translate to reality and we know how that ended.

@g0 OMG David LaRose is the biggest blowhard and empty suit I ever saw in 40 years in tech.

@k9 The current PE is crazy, but remember it’s a trailing PE. I believe it shows just how effective IBM’s offshore (eg cost take out has been). When you replace 100k head count worth of cost for 33% of it, the 66% of cost that you saved drops right to the bottom line, and gives you a one time crazy PE. If you look at forward earnings PE, it’s still high, BUT a much more reasonable 25. Given that the market average for forward PE’s of the s&p are running in the 19-20 range, IBM is still high, but 80% SW margins will do that. Comparing IBM’s forward 25 PE with “other” primarily SW company’s PE’s that are running in the low 30’s range, makes IBM a little more reasonable. NET NET Wall Street currently is pricing in IBM’s cost take out and the crazy PE number is reflecting that

Got 99 problems but a b named Wooley ain't one

A $320 share price would mean a PE ratio of 55 up from the current 48. Revenue growth over the last few years has averaged 2% (less than the inflation rate, so shrinking in real terms).

PE ratio of other Tech companies:
NVDA - 47
MSFT - 37
AMZN - 35
GOOG - 20
META - 27

Ask yourself if it makes sense for IBM to be valued higher than any of these other companies. These other companies are growing revenue 10-20% per year (or 100%+ for NVDA).

Did anyone else notice that David L, who has been the GM of IBM's partner ecosystem for almost 6 years, was passed over in favor of Kareem? Wonder how long he will stay?

Can IBM get to 320 per share? Most likely yes, but they will need to continue on the path that they are currently embarked on, which is “cost take out” IBM’s go forward problem is the NA and Northern European cost take out plan, has pretty much run its course (eg there is no one left to effectively remove). As such IBM has to embark on 1 of 3 plays left in their bag of strategies

1. Double down on AI to replace the commodity labor pool (this over time is a cost take out play)
2. Double down on buying enterprise SW and acting as the distributor (essentially 2x the current run rate)
3. Increase revenues dramatically by expanding into new markets. (IBM has been running in place for 3-4years. Legacy revenue shrinks by the amount of SW expansion. As such cost take out has dropped to the bottom line (folks offshore work for less to do the same jobs). As I said above this policy has run its course, and if revenues don’t go up, IBM’s earnings per share stall.

Will IBM be able to leverage Quantum, hybrid enterprise, and purchased SW innovation? Time will tell, BUT the easy cost take out ship (offshoring) has sailed and IBM has to actually grow soon as they can’t continue to save their way to prosperity

Bank Of America Says IBM Stock Still Has Room For Gains

B Of A says their new target for IBM is $320

https://www.msn.com/en-us/money/topstocks/ibm-keeps-hitting-record-highs-bank-of-america-says-theres-still-room-for-gains/ar-AA1GYoSy?ocid=BingNewsSerp

@e7

Yeah, but if the stock gets to $300 too quickly and then falls to $150 soon after, a certain person will be left in the dust since he won't be able to collect his $100 million bonus in early 2026. After all, he has to achieve certain targets too and maintain them to keep up appearances. The investment funds will go after him for sure if the scenario above happens. They all want their pound of flesh (metaphorically speaking).

@aw+1jy1fmgxg 100% correct. Next stop after $300 will be $150 and EVERYONE knows it. They are gutting IBM to hit the $300 target and then the entire house of cards will collapse right after.

Another DEI pick bites the dust

Just watch the mass exodus of the ELT once the share prices hits the magic $300 figure touted by fat boy Jim. Like rats off a sinking ship!

Wooley by name, woolgathering by nature...

The Ecosystem was nothing but a load of Camel droppings.

The IBM stock is being puffed up to get to $300.