IBM is maybe the most well-known computer firm in the world. They were for a period of time, the global leader in computer systems for both corporate and research purposes. IBM now specializes in hybrid cloud solutions, which combine private cloud and public cloud services on-premises.
Our guide will show you how to open a brokerage account and start investing in IBM stock.
Quick History of IBM
IBM (International Business Machines Corporation) is a global technology corporation located in Armonk, New York. The computing company was established in Endicott, New York, in 1911.
This multinational corporation manufactures and distributes computer hardware and software. IBM’s business activities have consistently changed to focus on higher-value, increasingly profitable areas.
During the 1970s, the IBM mainframe, represented by the System/360, was the preeminent computer platform. In 2012, IBM announced the company had purchased Kenexa and Texas Memory Systems. The company also acquired Merge Healthcare for $1 billion and The Weather Company’s online platforms, including Weather.com and even the Weather Channel mobile app.
The Good and the Bad of IBM Stock
Owning stock or shares in a firm has various advantages. Here are some of the benefits and drawbacks of holding IBM stock.
Pros of Owning IBM Stock
- IBM has a substantial presence in a variety of industries, particularly as an IT solutions provider for several powerful corporations.
- The company’s structure, client list, and existing operations provide a substantial margin of safety in this economic climate.
Cons of Owning IBM Stock
- The firm will split in 2021, therefore it will spend the rest of the year figuring out how to divide rather than expanding.
- No buybacks are planned by IBM until debt ratios improve, which is expected to happen around 2022.
- Due to COVID-19, revenue expectations for 2021 have been reduced from $80 billion to $76 billion, while EPS forecasts for 2022 have been reduced from $15 to $13.
Outlook for IBM Stock
In 2021 so far IBMs Total cloud revenue increased by 21% to $6.5 billion. In the previous 12 months, cloud revenue increased by 19% to 26.3 billion. Over the previous 12 months IBM reported $4.9 billion in net cash from operating operations, which was up $0.4 billion.
The company earned $2.2 billion in adjusted free cash flow, which was up $0.8 billion. After four quarters of losses, IBM finally reported earnings growth.
During the quarter, the company announced the purchases of two cloud consulting organizations. On an annualized basis, revenue increased by 0.9 percent in the quarter, compared to a 6 percent drop the previous quarter. Red Hat is part of IBM’s Cloud and Cognitive Software segment, which brought in $5.44 billion in revenue, up 4%.
Steps to Buy IBM Stock
To buy IBM stock, you must first create a brokerage account, then a trading account, deposit funds, and then start buying shares.
Step 1: Select a Brokerage
You’ll need to find a brokerage account that suits you to start your investment journey. Consider creating a brokerage account now so that you are ready when the stock is available.
Step 2: Open the Trading Account
Once you’ve determined which brokerage is appropriate for you, you’ll need to create an account with them. This account will be used to post transactions and trade stocks
Step 3: Deposit Funds Into the Account
After you’ve linked an approved method of payment to your account, you’ll be able to deposit funds to purchase IBM shares. Once your account is officially activated, you must specify how many shares of IBM stock you wish to acquire.
Step 4: Search for the IBM Ticker Symbol (IBM)
Find the stock using the name or ticker symbol IBM and conduct some research before deciding whether it’s a good investment for you. This can be done easily on any of the trading platforms.
Step 5: Purchase IBM Stock
Brokers will have a “deal ticket” at the bottom of each page where you will be able to place your order. You will enter the symbol and the number of shares you wish to purchase on the broker’s order form.
You can buy as many shares as you like with a market order, or you can use a limit order to postpone the purchase until the stock reaches a particular price.
Is IBM a Good Buy?
Following years of economic losses, IBM (NYSE:IBM) is in the middle of a recovery. The company’s focus is now on transitioning into cloud computing and artificial intelligence (AI). IBM chose to split off its managed infrastructure services in order to accelerate its emphasis on cloud solutions.
Any purchase in IBM shares now entitles you to ownership of both IBM and Kyndryl following the spinoff so this stock could prove to be an excellent investment. The firm has a lot of appealing characteristics. Its cloud approach is excellent, and it pays a consistent dividend. If you would like to start investing in different stocks then you should consider contacting a financial advisor.