IBM's business model is fading as cloud computing begins its life. Over the next decade, we should see more and more companies putting applications onto the web, and IBM will not likely be a leader in this category, due to strength of companies like CRM and GOOG. In past downturns, IBM's stock has taken big hits from 58% to 84% drops, I surmise IBM's long-term and short-term risks can take the stock down at least 58% (2000-2002 drop) and possibly as high as the first IBM business model challenge (1987-1988) when MSFT began challenging their business model. Google and CRM are about as young today as MSFT/HPQ was back in 1987. Upside should prove less than recent all-time high of $130, more like $110. Thus from $89, there's not much upside potential for IBM unless both the recession has bottomed AND IBM's business model is in no danger. Seems unlikely, altho always possible in a bull-run this year.
$89.63 (01/21/09)
