Unlike some of the other post-earnings sell-offs, IBM’s fundamentals still look fairly solid. Revenue grew 5%, software grew 8%, and management raised its full-year free-cash-flow outlook. That makes the drop look more like high expectations being reset than the investment thesis breaking.
Lam Research also delivered strong numbers, but semiconductor sentiment is currently fragile and its outlook was not strong enough to satisfy elevated AI expectations. Tesla has much greater upside potential, but its valuation and heavy AI/robotics spending make its recovery more dependent on sentiment. AT&T is steadier, but probably lacks the catalyst for a sharp rebound.
So for me: IBM first for probability of recovery, Tesla for biggest potential rebound if risk appetite suddenly returns.
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