International Business Machines Corp. (NYSE:IBM) has ditched a five year plan of its earnings and announced that it will reveal an update to its projections in January. As a result, IBM stock tumbled by no less than 5%. International Business Machines Corp. (NYSE:IBM) has brushed a three year low and the company might face horrific backfire from the investors. Among IBM’s shareholders is Warren Buffett, who just lost $900 million of his investment in the chipmaker. Doug Freedman, Managing Director, US Semiconductor Research at RBC Capital Markets discussed this decision of IBM in a program on CNBC and said that the major problem for International Business Machines Corp. (NYSE:IBM) is the lack in software products.
Freedman said that International Business Machines Corp. (NYSE:IBM)’s migration to Cloud domain has caused a disruption in the flow of the company’s overall consumer base. Customers have to pay extra cost and the quality of Cloud platform is not promising either. Semiconductor and hardware sector is not challenging for International Business Machines Corp. (NYSE:IBM), but the contemporary trends in the market have forced to company to opt for Cloud services.
International Business Machines Corp. (NYSE:IBM) is reportedly handing over its chip unit to Globalfoundries Inc. The company is also reducing jobs and making a shift in the market to face new challenges. International Business Machines Corp. (NYSE:IBM) reported low sales in the software for the third quarter. International Business Machines Corp. (NYSE:IBM) missed expectations and the revenue missed the targets by 4%. Bad days for notorious investor Warren Buffet are ongoing. A few days ago, Buffet accepted that he made a huge mistake in his decision about Tesco.
This is the tenth consecutive quarterly drop for International Business Machines Corp. (NYSE:IBM). If this trend continues and the company does not revamp its Cloud and software sector drastically, investors might distance themselves from the chipmakers. International Business Machines Corp. (NYSE:IBM) reported a revenue of $22.4 billion in the third quarter.
Warren Buffett’s Berkshire Hathaway hold around 70 million International Business Machines Corp. (NYSE:IBM) shares.
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