On a February evening in 2011, Watson—a supercomputer with artificial intelligence created by International Business Machines Corp.—made history when it beat humans in a game of cognitive intelligence. And these weren’t just any humans. These were longtime “Jeopardy” champions, deemed among the most intelligent human contestants to ever grace the game show stage.

The Watson win was a major win for IBM IBM, +0.21% at the time, underscoring its transition to a new-age technology company with artificially-intelligent computers. It sent a clear message that IBM was no longer an aging legacy hardware company crippling under newer competition, but a bellwether of innovation yet to come in the realms of AI and big-data analytics.

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Today, technologies such as these underpin much of the technological development fueling the shift from mobile to the cloud. Evidence of Watson-like AI can be found in the digital assistants offered by companies like Apple Inc. AAPL, -1.79% and Amazon.com Inc. AMZN, -2.77% , and in a wide range of cloud services.

IBM, however, has never managed to take advantage of the head start it seemed to have in AI. The company’s multiyear turnaround continues to move at a snail’s pace, which has been off-putting to some very large investors, and despite a large PR campaign around Watson, has never broken out the revenue it receives from the initiative.

On Friday, shares of IBM fell 3% to $154.45 after billionaire investor Warren Buffett announced that his company Berkshire Hathaway Inc. BRK.A, -1.11% sold about a third of its stake in IBM. It has unloaded 30 million shares so far in 2017, from the 81 million shares it held at the end of 2016.

“I don’t value IBM the same way that I did six years ago when I started buying,” Buffett said.

Buffett bought more than $10 billion in IBM shares the year Watson won “Jeopardy,” and increased his stake a few more times in the years proceeding.

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The Buffett blow followed a downgrade of IBM’s credit rating by Moody’s on Wednesday, which pointed to IBM’s “high level of investments” in recent years to support its transformation. The spending spree has negatively impacted Big Blue’s profitability and cash flow for a longer-than-expected period of time, Moody’s said.

IBM also announced weak quarterly earnings report on April 18. IBM reported profit and revenue declines, even as its newer software-as-a-service business saw revenue gains of 60%. The company’s revenue slipped to its lowest level in 15 years.

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A few analysts came to IBM’s defense the day after those earnings hit, encouraging investors willing to wait through the transition to buy on the low. Stifel analyst David Grossman said the selloff provided an “opportunistic entry point,” but admitted that the transition was testing his patience.

The average rating on the stock is the equivalent to hold, while the average 12-month price target of $166.27 implies 7.5% upside from Friday afternoon trading prices. Shares of IBM have declined by 12% in the past three months, underperforming both the Dow Jones Industrial Average DJIA, -0.81% and the S&P 500 SPX, -1.20% . The Dow 30 has gained 4.5% over that time.

The lengthy transition juxtaposed against an influx of competition has investors and analysts on edge. Morningstar analyst Andrew Lang said the jury is still out on whether Watson and other strategic initiatives benefit IBM’s long-term competitive position. The competitive environment is fierce, he said, particularly with cloud computing “permeating throughout the IT landscape.”

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Patrick Moorhead, principal analyst at Moor Insights & Strategy, pointed to Watson, Power AI, SoftLayer Bluemix and Quantum Computing as successes of the IBM transition, but said IBM seems to be having trouble attracting new customers, evidenced by its historically low sales.

“IBM has many solid elements to their new business,” he said, “but the company needs to move quickly to exploit those capabilities.”

In a note to clients Friday, Bernstein Research analyst Toni Sacconaghi reiterated a market-perform rating and $150 target on the stock, but said he believes shares are too expensive given “significant secular pressures” and uncertainties surrounding several aspects of IBM’s turnaround.

“It has been a rough few weeks for Big Blue,” he said. “The key question for investors is whether they should look to build positions now? Our simple answer: No.”

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