IBM’s Performance and AI Positioning
IBM (NYSE: IBM) has shown a 55% increase in free cash flow over the past three years, despite only 7.3% revenue growth. This positions the company as a stable alternative for investors looking for AI exposure, with a beta value of 0.70, indicating lower volatility compared to high-growth stocks like Nvidia and Microsoft, which have beta values significantly above 1.
As of August 22, IBM trades at 18 times free cash flow and 3.5 times trailing sales, making its valuation more conservative than many tech peers. The company’s dividend yield stands at 2.8%, higher than the S&P 500 average of 1.2%. Despite being down about 19% from its 52-week high, IBM’s recent stock performance has drawn attention as a potential entry point for new investments.
