Badly Crippled IBM Can’t Be Fixed

Core Insights - IBM is attempting to pivot towards artificial intelligence but currently lacks a significant position in the sector, raising concerns about its future relevance in the tech industry [1][5] - The company's recent earnings report showed a modest revenue increase of 9% to $16.3 billion, with earnings per share rising to $1.87, although this was influenced by prior charges [3] - IBM's historical missteps, particularly in software development, have led to a loss of competitive edge, allowing companies like Microsoft to dominate the market [4] Financial Performance - IBM's revenue increased by 9% to $16.3 billion, while operating (non-GAAP) pretax income from continuing operations rose to $3.0 billion from $2.5 billion year-over-year [3] - The earnings per share improved to $1.87 from a loss of $0.36 in the previous year, but this was affected by a charge in the prior quarter [3] Competitive Landscape - IBM has struggled to maintain relevance in the tech sector, missing opportunities in key areas such as personal computers, e-commerce, and AI, which has diminished its status as a partner for major AI players [2][5] - In contrast, Microsoft reported a significant revenue increase from $65.6 billion to $77.7 billion, with net income nearly double that of IBM's revenue, highlighting the competitive gap [4]