24/7 Wall St. Insights
- International Business Machines Corp. (NYSE: IBM) was once America’s premier tech public corporation.
- Now it pales in comparison to Microsoft Corp. (NASDAQ: MSFT) and other mega tech leaders.
- Also: Discover the Next Nvidia.
International Business Machines Corp. (NYSE: IBM) is at the bottom of the barrel of big tech companies. It barely belongs there because of its relatively small revenue and modest market capitalization. Since it was once America’s premier tech public corporation, it gets a place on the list.
In the most recently reported quarter, IBM’s revenue rose 2% year over year to $15.8 billion. Net income was $1.83 billion, compared to $1.58 billion a year ago. Microsoft Corp. (NASDAQ: MSFT), for comparison, has yet to report second-quarter earnings. However, based on its quarterly revenue run rate, the figure will be about $60 billion, with a net income of $20 billion.
IBM’s market cap tells an even worse story. It is $169 billion, while Microsoft’s is $3.18 trillion. Microsoft’s share price has increased by 203% in the past five years, while IBM’s is 27% higher for the same period.
IBM continues to struggle with the latest technology. Microsoft is the market leader. IBM barely has a footprint in the sector.
In 1985, IBM ranked sixth on the Fortune 500 list. This year, it ranked 63rd. Microsoft, still in a start-up phase in 1985, ranks 13th today. Amazon and Apple rank second and third. Amazon was not founded until 1994, and Apple was started in 1976.
Compared to America’s mega tech companies, IBM may be the industry’s largest failure over the past several decades.
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