If you feel like there is a bullseye painted on your back, read a piece titled The Hatchet Man's Playbook. Can't recommend it highly enough - a LOT of eye-poppping, non-obvious stuff!
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@fx I believe you are not taking into account IBM’s SW strategy of buying innovation vs developing it. IBM has bought a pile of companies (approx 21) since the 2019 purchase of redhat, and they all compliment the strategy of growing SW group and its 90% margins.
Remember IBM is really
Consulting = find enterprise opportunities and cultivate and integrate IBM SW solutions
Infrastructure = provide unique enterprise HW solutions that IBM SW runs on
SW = provide unique enterprise SW solutions that make IBM money
Only thing actually growing in SW is RH and that's only because customers are forced to buy OpenShift with all SW even if they don't want it. Even then almost all the overall IBM growth is nothing more than annual inflation price increases baked into contracts.
Actually revenue is growing in SW group via buying innovation and taking on debt, but revenue is shrinking in legacy infrastructure. Consulting is a wash. Because SW group has 80% margins, Wall Street has fallen in love with IBM again. Can IBM keep it up? Most likely yes because the business cycle is turning to their favor (eg new mainframe and P11 in 2025) Business cycles in IBM tend to run hot for 6-7 quarters, thus IBM’s FCF increase for 2025 and most likely for 2026.
What do you expect?!? Revenue is not growing yet IBM is promising more Free Cash Flow every year to the shareholders… that means that costs need to drop (3.5B this year alone)… just become a shareholder and enjoy the price bump… the stock is going to $300 before year end.,