IBM Returns To Revenue Growth, But Is It Sustainable?

On Jan. 21, IBM (NYSE: IBM) reported fourth-quarter earnings for 2019. Following the close of its Red Hat acquisition on July 9, 2019, this was the second full quarter with Red Hat consolidated in its results. Then this week, Big Blue announced its CEO Ginni Rometty was stepping down.

With a $34 billion price tag, IBM made a big bet on Red Hat based on the premise it would accelerate IBM's efforts in the cloud. Red Hat is the leading provider of hybrid cloud solutions, a rapidly growing sub-sector of the overall cloud industry. Together, IBM and Red Hat's hybrid multi-cloud platform offerings allow businesses to securely deploy, run, and manage data and applications on-premises and on private and multiple public clouds. The acquisition was supposed to be symbiotic; Red Hat would open up the hybrid market and its customer base to IBM, and IBM's incumbency and scale would help accelerate Red Hat's growth.

Six months in, investors are looking to see any signs that this plan is paying off for the tech stock.

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Source Fool.com