Stifel’s sum-of-the-parts valuation suggests IBM’s enterprise value could reach $257 billion, exceeding its $205 billion market cap.
IBM shares plunged 25% after the company reported Q2 revenue of $17.2 billion, missing estimates of $17.85 billion. Non-GAAP earnings of $2.93 also fell short of the $3.02 forecast, marking its worst trading day since 1961.
Stifel analyst David Grossman conducted a sum-of-the-parts analysis, valuing IBM at $257 billion, with Red Hat contributing $62.9 billion. IBM’s current market cap stands at $205 billion. The analysis reignited speculation about a potential breakup, though Grossman noted challenges in execution.
IBM’s hybrid cloud strategy, anchored by its $34 billion Red Hat acquisition, remains central to growth. The company has pursued transformative deals, including PwC Consulting and Cognos, to drive long-term expansion.