NEW YORK (CNN/MONEY) - Back in the go-go 1960s, IBM was one of the top-performing stocks, along with other members of the so-called Nifty Fifty, such as Polaroid and Xerox. But after being crushed by the recessions of the early 1970s, these glamour stocks no longer looked so nifty.

Since then, IBM has had its ups and downs. But even at its hottest, it has never really ranked with the newer tech stars, such as Cisco, Dell and Microsoft. Over the past five years, in fact, Big Blue's average earnings growth has lagged that of the top techs by five percentage points annually.

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Now, however, IBM's days of underperformance may be over. A growing number of analysts believe that the company will not only match industry growth during the next two or three years, but actually surpass it. And IBM's CEO Samuel Palmisano has explicitly set that goal.

IBM is one of the best-diversified tech stocks and because of its history remains dominant in the large-computer end of the business. To outpace the industry, IBM has to show strong sales growth and improving profit margins in most of its business lines.

Corporate information technology spending has been recovering but remains several percentage points below its long-term trend of 7 percent-plus annual growth. So a continued recovery in IT spending would be good news.

Moreover, IBM (IBM: Research, Estimates) is aiming to gain share in the server market, the descendent of IBM's historical mainframe business. For the most recent quarter, IBM reported 16 percent annualized growth in hardware sales, with some server lines growing at more than 20 percent.

Software sales are also showing strength. Moreover, IBM is targeting Oracle's customer base by offering server software that works with Microsoft desktop software.

IBM's service business is its largest division, accounting for about half of total revenue. This business has yet to show any real pickup. But Global Services should be a direct beneficiary of an improving worldwide economy. Moreover, IBM notes that its customers' computer infrastructure systems are the oldest -- and therefore the most in need of updating -- that they've been in 20 years.

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When it comes to valuation, however, IBM stock is priced as though the company has none of these opportunities. At this point, analysts project compound annual earnings growth that's barely in the double-digits. Combined with a 0.8 percent yield, that indicates a likely total return that's only average, more in line with a food company than a tech stock.

The shares are priced accordingly. At $87.10, IBM stock trades at less than 18 times estimated earnings for the current year and less than 16 times projected results for 2005.

That's barely the historical average for blue chips. If IBM is able to match or exceed computer sector growth, the stock will certainly deserve some premium. Analysts who have upgraded the stock recently think the stock could gain about 20 percent within the next 12 months.

Michael Sivy is an editor-at-large for MONEY magazine. The Sivy on Stocks column and newsletter is available only to MONEY subscribers and AOL members. Subscribe now and you will also receive access to the Sivy 70 -- our exclusive list of America's Best Stocks -- and coming in June, to Sivy's Guide to Growth. Click here to subscribe to MONEY and to sign-up for the Sivy newsletter.