Investors reacted negatively to the second-quarter earnings report from International Business Machines (NYSE: IBM). While revenue and cash flows continue to improve, investors balked as cash flows failed to meet expectations.

However, such challenges do not change the fact that its transformation continues to succeed. Amid some minor uncertainty, the latest decline looks like an opportunity to buy into this cloud stock at a lower price.

IBM received yet another reminder that the market is an expectations game. Like many stocks, rising wage inflation and the rising dollar put pressure on its gross profit margins. These margins fell to 53% for the first half of 2022 versus 54% in the first six months of 2021.

Continue reading

Source Fool.com