—IBM and VMware are the only two US tech companies valued over $50B that survived 2022 with their stocks in positives.
—The Big Blue focused on safer bets and slower growth as well its consulting business.
In 2022, tech companies saw their stocks take heavy hits and IBM, a 111-year-old company, is one of the only two to survive the year unscathed, which means its shares appreciated.
According to a CNBC report, IBM stock was up by 6% for 2022 and one year to today (28 December), the company’s stocks were up by 7.38%.
If you have been following tech stories, you likely understand why this is impressive. If you haven’t, see stories like How these 7 big tech companies lost $3 trillion in market cap in just one year and the several reasons behind thousands of tech layoffs this year alone.
The only other US tech company, with a market cap higher than $50B, to see a positive return this year was VMware, a cloud computing business. And there is the clue on how IBM stayed in the green, its activities in the cloud computing industry.
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The company’s biggest bets were not overly affected by the market volatility caused by the Russian-Ukraine invasion, high gas prices, increasing inflation and bahaviour changes on the part of clients. IBM chose to further improve its relationship with Amazon and Microsoft in the cloud space, instead of investing more in unstable markets.
In addition, the ‘Big Blue’ also put its money in equally stable companies like Exxon Mobil, Merck, Northrop Grumman, and Lockheed Martin.
Another thing that IBM did well entering 2022 was giving Kyndryl, an IT management company, its freedom and making it an independent trading company. Up until 2021, it had been a division under the giant tech firm, but now, it is responsible for its success and failures.
IBM also owes its success to its consulting business, which is responsible for one-third of its revenue. It also bought similar companies like Octo, Dialexa, and Sentaca, all of which are consulting outfits. Then, there was its innovative mainframe computer, the z16, which prompted clients upgrade and sales of software and mainframe.
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