From Yahoo Finance: 2025-05-03 04:12:00

IBM plans to invest $150 billion over five years, with $30 billion allocated to mainframe and quantum computing. Despite growth under CEO Arvind Krishna, revenue remains slow. Investors seek clarity on funding. The move aligns with the “build American” trend, positioning IBM as a leader in cloud and mainframe computing.

Although IBM stock has outperformed since Krishna’s tenure, Q1 revenue grew only 1%. The $150 billion investment could transform IBM, which spent $321 million in capex in Q1. Investors question funding, as IBM holds $17 billion in liquidity and expects $13.5 billion in free cash flow in 2025.

Investors are hopeful for IBM’s future with the $150 billion investment, but concerns arise over free cash flow reduction and high debt levels. The investment is seen as necessary for IBM to stay competitive, but shareholders await details on how the company will fund these initiatives. IBM remains a hold for now.

The Motley Fool Stock Advisor team did not include IBM in their top 10 stock picks, which have historically produced substantial returns. IBM’s $150 billion investment may lead to growth, but uncertainties around funding, decreased free cash flow, and high debt levels make it a cautious choice for investors.



Read more at Yahoo Finance: IBM Plans to Invest $150 Billion. Time to Buy the Stock?