11 May 1997: Deep Blue beats Kasparov
On May 11, 1997 IBM's Deep Blue supercomputer won the final game of a six-game rematch against world chess champion Garry Kasparov, the first time a computer beat a reigning champion in a match under standard tournament conditions. Kasparov suggested foul play. IBM got a public relations bonanza and its shares rose to a record in the days that followed. It retired Deep Blue soon after.
The lesson: Headline breakthroughs can lift a stock quickly, even when they change little about the business's earnings.
What it meant for investors
$1,000 in IBM at the start of 2000 → $2,636 today, vs $4,626 in the S&P 500.
We start the clock at the start of 2000, the first year in our price data after the event. That is 2.6 times the money, but $1,989 less than a plain index fund made over the same years.
What IBM teaches: Buybacks cannot substitute for growth; IBM spent tens of billions shrinking its share count while revenue declined, and the stock went nowhere for years.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2000 | $110 | $2,636 | $4,626 |
| 2003 | $80.00 | $3,625 | $7,727 |
| 2005 | $98.00 | $2,959 | $5,763 |
green = beat the S&P 500 · red = lost money
What if you bought IBM? Every starting year and the full story →
More IBM history
- 7 April 1964: IBM bets the company on System/360
- 12 August 1981: IBM launches the personal computer
- 28 October 2018: IBM bets $34 billion on Red Hat
- 7 December 2004: IBM sells its PC business to Lenovo
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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