Is IBM's Crash Really a Buying Opportunity?
IBM released an earnings warning that sent the stock spiraling.
Overview
IBM (NYSE: IBM) stock fell off a cliff this week. Dropping more than 25% in one day, IBM posted its worst decline in its more than a century-old history, erasing roughly $67 billion in market value.
The horrible day was triggered by an earnings warning from the company, where revenue and growth fell far short of expectations. The question now is whether the short-term trouble could present a longer-term opportunity.
Details
The reason IBM's earnings fell precipitously is a rotation away from software toward memory and AI servers. There is incredible demand and a constrained supply for AI accelerators and memory chips. IBM's customers reallocated funds accordingly, locking down their hardware needs before prices skyrocket too far. IBM CEO Arvind Krishna admitted the company didn't anticipate the sheer scale of this shift.
Source
Originally published at www.fool.com.