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IBM shares fell more than 20% after the company warned that second-quarter earnings came in below expectations.
The CEO attributed the miss to weakness in the software and infrastructure business, with clients moving spending toward hardware purchases instead.
The combination hit two segments at once and left the market with more questions than the warning answered. Where the shortfall landed The case for IBM heading into the quarter rested on software and infrastructure.
The CEO's explanation pointed to a single cause: clients shifted their budgets toward hardware. It is also one that implicates a client decision IBM did not control. What's changed is the direction of client spending.
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