u/Rez_X_RS ·
Reddit — r/ValueInvesting
· February 24, 2026 at 00:00
· ⬆ 33 pts
· 💬 49 comments
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AI Summary
Summary
The post highlights that IBM's stock price is approaching its lows from April, suggesting a potential buying opportunity.
The author's thesis is that IBM is currently undervalued based on its forward P/E, recent price decline (indicated by a low RSI), and the market's overblown, near-term fears about AI disruption.
Quality assessment: This is light speculation. The author provides a few valuation metrics (Forward P/E, RSI) but does not offer a deep dive into the company's fundamentals, competitive landscape, or a detailed valuation model. The thesis relies on a contrarian view of AI risk without substantial supporting evidence.
The stock has fallen to near its April lows, has a forward P/E of 16, and an RSI of 22, indicating it is potentially oversold. The market is overly pessimistic about the immediate threat of AI to IBM's business model. The author believes the company's current valuation does not reflect its potential for a turnaround, making it an attractive entry point for a value-oriented, contrarian investment. The stock is considered undervalued due to a recent price drop and a reasonable forward valuation, presenting a favorable risk/reward opportunity for a rebound in the coming months. The primary risk is that the market's concerns about AI's impact on IBM are justified and will materialize sooner than the author expects, leading to further business deterioration and stock price decline. The company's "AI achievements constantly falling short" could be a symptom of a deeper, more persistent problem.