IBM faces a long road back to growth despite gains in the tech giant's strategic imperatives, Cantor Fitzgerald analyst Joe Foresi said Tuesday.
IBM reported first-quarter earnings Monday that beat on the top and bottom line as it saw a double-digit increase in revenue from its cloud services. Despite topping expectations, the company's quarterly revenue fell for the 16th-straight quarter.
Big Blue's worst revenue in 14 years sent its shares tumbling. The stock was down nearly 4 percent in premarket trading Tuesday.
Under Chief Executive Ginni Rometty, IBM has been moving toward areas such as cloud-based services, security software and data analytics, while trimming its traditional hardware business by exiting low-margin businesses.
The problem is that revenues generated by 60 to 70 percent of IBM's business are still declining 10 percent, Foresi told CNBC's "Squawk Box."
"Really, that's the area where we're most concerned," he said. "We don't have this company returning to growth for another two years."