IBM (NYSE:IBM) recently reported its first-quarter earnings results, which came in ahead of analyst expectations. Still, shares were sold off after the release, and the stock remains down about 10% from its pre-earnings price, as the mere reiteration of full-year guidance was less than investors were hoping for.

IBM is a business in transition, with considerable disagreement as to how that transition is going. The company is moving away from managing on-premise data centers and into new products based around cloud, cybersecurity, and big data analytics. The question is whether the growers can overtake the declining business lines. Given the crosscurrents, let's assess which of IBM's businesses are hot, and which are not.

Silver bull and bear figurines face each other.

IBM stock is down after earnings. Image source: Getty Images.

Hot: Cloud

In enterprise IT, cloud is the name of the game these days, and IBM Cloud has been growing strongly as it migrates clients away from traditional data centers. CFO Jim Kavanaugh announced that IBM's new Cloud Private offering now boasts over 200 clients. In the quarter, the cloud segment grew 14%, and it's an increasingly large portion of IBM's business at 22% of revenue.

While that growth number is strong, it marks a deceleration, as cloud revenue growth over the trailing 12 months was at 22%. Also keep in mind that the overall cloud industry is growing at about 22% annually, according to Forrester Research. So while it's good that IBM is holding its own, it's not necessarily taking market share. Instead, IBM appears to be aiming to specialize on the high end.

Hot: Z mainframes

IBM is riding a growth wave in mainframes from the September introduction of its new z14 mainframe, which is embedded with end-to-end encryption. In the quarter, z14 revenue grew 54%, helping to fuel a 6% growth in IBM's systems segment.

While this growth is impressive, skeptics may feel the Z family's success is not necessarily sustainable, as hardware can be cyclical and is therefore lower quality than recurring revenue. IBM's "as-a-service" revenue increased to a $10.7 billion run rate, but that's still only about 13.5% of overall sales for Big Blue.

Hot: Security

Security also grew robustly in the quarter at 60% (in constant currency) to $800 million, for roughly a $3.4 billion run rate. Kavanaugh also claimed IBM was "taking share" in this key vertical. As the number of high-profile hacks has been increasing over the past few years, security could be a key driver for IBM in the years ahead, as it aims to be a trusted provider of high-value solutions. Still, security only made up roughly 4.1% of first-quarter revenue.

Hot: Blockchain

Among the newest and most exciting products from IBM are its blockchain solutions. The company reported that the number of blockchain networks it was running for clients stood at around 50, up from roughly 35 just one quarter ago for an increase of 42.8%. It's unclear how much direct revenue these blockchain networks contribute, though I suspect IBM monetizes them through software, cloud, and mainframe revenue (as blockchain networks use all of these tools).

IBM also unveiled the IBM Blockchain Platform Starter Plan last quarter, geared toward start-ups. Since the beta version of the kit was unveiled just a month ago, over 750 active networks have been provisioned, according to the company. As the number of active networks grows, I suspect revenue will follow.

Not: Storage

The explosion of data and artificial intelligence analytics should boost the need for storage systems, yet IBM's storage business had a bad quarter, falling 15% year over year after four straight quarters of growth. Of the quarterly miss, Kavanaugh said: "This market in storage ... continue[s] to be very competitive and very aggressive. It is a battle right now on market share, but we feel comfortable that we've got new portfolio offerings that are coming out later in the year."

Certainly, a storage miss, especially of that magnitude, was a surprise, but it ties into IBM's inconsistency with some of its legacy and commoditized offerings. Kavanaugh was confident the storage business is fixable, but this business line remains a question mark at the moment.

Skeptics abound

Given the growth in several key new products, one may wonder why IBM's stock sold off. The market seems to think many of its products are too small, or merely cannibalizing older products (hence the 0% overall growth in constant currency).

Investors should keep an eye on these key growth drivers -- cloud, security, and blockchain -- as they hold the key to the company's future. The market is skeptical, so IBM likely won't go up until it proves it can grow even without robust mainframe sales.

Billy Duberstein owns shares of IBM. His clients may own shares of some of the companies mentioned. The Motley Fool is short shares of IBM. The Motley Fool has a disclosure policy.