http://investorplace.com/2017/05/cry-for-international-business-machines-corp-ibm-stock-not-for-buffett/amp/
Best excerpt from the article --
What’s Left for IBM Stock?
The cloud game is over, and IBM lost. Its vaunted Watson software system is a niche product, a nice front-end for getting questions answered through clouds, but nothing more.
IBM stock no longer has the size to even compete in this space. Its market cap is under $150 billion, making it a minnow next to the cloud giants. It is even smaller than Oracle Corporation (NYSE:ORCL), which is valued at $190 billion.
A merger between Oracle and IBM might let its experts at lock-in get out their investment. Microsoft might want it for the customers, and Google might take it for the technology.
But technology is a grow-or-die game. Once you lose your place in the “great game,” on the leading edge of the space, you don’t get back in. It’s like my old alma mater, Rice University, which lost its place as part of a “big-time” football conference 20 years ago and now has no hope of making money at the game ever again.
IBM’s moat of mainframes continues to dry up, its sales slowly declining year upon year. There soon will not be enough profit to sustain the dividend, and the company is going to have to put itself up for sale.
Former IBM CEO Lou Gerstner rebuilt the company on “software and services” almost a quarter-century ago, with services as something people could do, something people would sell. That’s no longer the case. In the cloud era, services are what algorithms do, and it’s mostly self-service.
IBM is lost in this century. Warren Buffett was right. He didn’t understand technology.