IBM Share Price Plummets Amid Weaker Earnings and Revenue Guidance

IBM's share price has taken a hit after the company reported weaker-than-expected second quarter earnings and lower revenue guidance. The decline has been significant, with the stock falling 21.9% over the past month and 23.3% year to date.

Despite this downturn, IBM's longer-term performance is more encouraging, with a 3-year total shareholder return of 70.8% and a 5-year total shareholder return of 97.6%. This has led some investors to view the recent pullback as an opportunity to reassess their tech exposure.

One narrative surrounding IBM's valuation suggests that the stock is currently undervalued, with a fair value estimate of $256.08, which is above its current price of $223.65. However, this perspective hinges on the company's ability to successfully execute its AI and quantum ambitions.