In 2018, IBM accomplished a feat that had eluded it since Ginni Rometty became CEO in 2012: annual revenue growth. The Armonk, N.Y. tech giant generated $79.6 billion last year, up 1% from the year prior. IBM has been a fixture on the Fortune 500 since our very first list in 1955, but Big Blue has spent the past several years turning an existential corner. IBM has shed dwindling divisions as it has plowed many billions of dollars into cloud computing, artificial intelligence, and cybersecurity for business. It has spent many more to acquire leading practitioners in those categories, topped by its $34 billion deal for business software maker Red Hat, the largest buy in IBM’s 108-year history. Such sweeping efforts appeared to pay off in 2018: IBM’s cloud business reached $19.2 billion, up 12% year over year, and its analytics business totaled $21.7 billion, up 5% for the year. (Elsewhere, security was up 28%, to $4.1 billion.) Will IBM’s relative success last? Investors seem to be suspending judgment—at least for now—valuing the company’s shares at around $140 in late April, on par with the stock price from a year ago, though up some 20% from its five-year low. The race continues.
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