Term Sheet | Fortune Is IBM cool again?

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From: CEO Daily | Fortune - Wednesday Jun 04, 2025 10:34 am
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Wednesday, June 4, 2025
Is IBM cool again?

The 2025 Fortune 500 is here—and the story’s just getting started. From AI breakthroughs and DEI rollbacks to leadership exits and return-to-office showdowns, this year’s business landscape is shifting fast. We’ve published the list. Now we’re tracking the moves.
Subscribe now to access the list, the profiles, and the reporting that follows what’s next.


• In today’s CEO Daily: Diane Brady on IBM’s new Manhattan HQ.
 • The big story: Trump complains Xi is ‘extremely hard to make a deal with’.
 • The markets: Up despite China deal and metals tariffs drama.
 • Analyst notes from Convera, EY, and UBS.
 • Plus: All the news and watercooler chat from Fortune.

Good morning. Is IBM cool again? During a NY Tech Week reception last night at IBM’s new Manhattan headquarters, I quietly asked that question to some attendees. One person cited Watson, the early chatbot that famously won Jeopardy! in 2011, as proof of both the company’s pioneering innovation, and its ability to lose a big lead. Others pointed to a positive shift that’s happened since Arvind Krishna became CEO of Big Blue in April 2020, both in terms of the stock price and meaningful growth in realms like AI.

My colleague Sharon Goldman explores IBM’s rebound in our Fortune 500 package that published this week. In many ways, it’s a model of resilience, having appeared on the Fortune 500 every year since debuting at No. 61 on the inaugural list in 1955. But it was the only brand among 17 U.S. tech companies valued at $100 billion or more to have lost market value over the past eight years when Krishna took over. 

Krishna is a 35-year IBM veteran who’s also its first CEO to boast an engineering background. And as Goldman writes, he was struck early on by the potential of AI. She writes: “Krishna, a PhD engineer with decades of research experience, instantly recognized a game changer—and a huge opportunity. Once these models were mature enough, he realized, they would be able to help businesses handle everything from customer service to chemistry equations to climate modeling with unprecedented scale and efficiency—creating powerful new products for IBM to sell.” 

Goldman adds that he has “steered billions in R&D money into new AI ‘foundation models’ and the infrastructure to support them. He also pushed the company to prepare for the rise of AI by updating its hybrid cloud platform—data-storage technology that Krishna had championed as the head of IBM’s cloud division.”

With the stock up over 20% year to date, there are certainly glimmers that Big Blue could be gaining momentum. Krishna is certainly up for the challenge. As he told Sharon: “Engineers don’t get scared about building big things.”

Read Sharon’s full story here.

More news below.

Contact CEO Daily via Diane Brady at diane.brady@fortune.com
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The markets

• The S&P 500 was up 0.6% Tuesday. The index is up 1.5% YTD. 
 • S&P futures were trading up 0.1% this morning. 
 • The Stoxx Europe 600 was up 0.5% in early trading. 
 • Asia was up: Japan was up 0.8%. Hong Kong rose 0.6%. Shanghai gained 0.4%, and India’s Nifty 50 was up 0.3%.
 • Bitcoin was sitting up at $105,400 this morning.

From the analysts 

• Convera on the USD: "Beyond short-term fluctuations, a bigger concern for long-term dollar positioning is the growing unease around de-dollarization. Trump’s proposed 'revenge tax'—Section 899 of his bill—introduces yet another disincentive for foreign investors, further eroding confidence in Treasury bonds and U.S. assets. Already, erratic trade policies and the nation’s deteriorating fiscal accounts have put pressure on dollar-denominated holdings, prompting global institutions to reassess exposure. If foreign investors perceive heightened risks, capital flow dynamics may shift further away from the dollar, reinforcing the long-term challenges facing the currency," per George Vessey.
 • EY on jobs: "The May jobs report will likely indicate that labor market dynamics slowed last month as elevated policy uncertainty, tariffs and reduced immigration flows weighed on employment growth. We anticipate the economy added 93,000 jobs in May following a 177,000 gain in April. The unemployment rate was likely unchanged at 4.2% while the labor force participation rate likely fell back to 62.5% as stricter immigration measures gradually weighed on labor supply. As companies put hiring plans on hold but refrain from broad-based layoffs, we foresee the pace of job creation slowing well below trend and the unemployment rate rising toward 4.8% by year-end," per Lydia Boussour.
 • UBS on market inflection: "After a steep sell-off and almost as fast recovery, the markets have found some stability in recent weeks, trading in relatively narrow ranges. This calm won’t last indefinitely, but it will take unexpected policy news or growth and inflation data to inflect the narrative and push the markets outside these ranges. Because the markets have recently been pricing in better policy, economic, and earnings news, the near-term risk is that these expectations are not met. But on a one-year outlook such tactical inflections are largely irrelevant, and over that horizon the fundamental outlook remains constructive. For that reason, we believe an inflection to the downside is a buying opportunity," per Jason Draho.

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