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IBM's stock fell 25% after chief executive Arvind Krishna acknowledged the company had "faltered," as enterprise customers redirected their technology budgets toward AI servers and storage.
The commercial logic behind that shift is straightforward. What changed for IBM's customers The case for IBM has long rested on software and services that sit above the hardware layer.
What's changed is where enterprise buyers are choosing to put their money first. When clients race to build AI infrastructure, servers and storage absorb the budget before it reaches the next layer up.
Krishna's word "faltered" is precise: IBM did not lose customers to a rival in the conventional sense. Buyers prioritized the compute and storage stack, and IBM's revenues reflected that sequencing.
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