Dec 15, 2016 07:31 AM EST

IBM Staying On: Can International Business Machines Corp.' Cloud, Watson And Controlled Buying Spree Help?

International Business Machines or IBM's New York Stock Exchange current rise on stock at 20% year to date is speculated to be a one-off shot  This is due to a multiyear decline previously. The stock is at an all-time low for about 15% over the past five years.

IBM has been thriving to come up with ways on how to increase their stocks like the venture in the cloud. The sudden rise this year give investors the sign that stocks can still rise. Revenue on the traditional business is still stagnant, but IBM's growth businesses, which is 40% of the total revenue, continue to grow at an impressive pace. 

IBM plans to produce EPS that can be sold at a lower rate of $13.50 this year. It's a bit down from $14.92 in 2015 and $16.53 in 2014. This year is the fifth annual revenue decline for the said business. Divestitures and currency fluctuations contributed to IBM's loss for the top line. To balance that, IBM focuses on cloud, analytics, mobile, social, and security. This resulted in the annual run rate of IBM's cloud-as-a-service businesses reaching $7.5 billion, up 65%, according to Nasdaq.

IBM's cognitive computing system is the key to the company's transformation. IBM is also pushing its healthcare industry involvement in a major way.Watson has been part of various partnerships to improve diagnoses and patient results. The company spent $2.6 billion this year for Truven Health Analytics as part of this project.

IBM CEO Virginia Rometty predicted that Watson can become a $10 billion business within a decade back starting in 2013. IBM Watson Group also announced today the launch of an SMS-based concierge bot, named At Your Service, at Fashion Island mall in Newport Beach, California. Shoppers just have to message (949) 734-7364 to get lists of convenient sources for the products that they are looking for, says Venture Beat.

IBM could still go bigger, especially after the company reduced its spending on share buybacks in 2015 and 2016. It may slow down its pace of acquisitions after a buying spree last year. This could make them more liquid in terms of cash for a larger dividend hike. 

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