IBM’s historic crash exposes AI spending trap

IBM's stock plummeted by a quarter on July 14 after the company reported disappointing preliminary second-quarter results, sparking concerns about its reliance on software and consulting deals for growth. The tech giant's shift towards artificial intelligence and cloud services may be a double-edged sword, as corporate IT budgets are increasingly prioritizing hardware over software. IBM's AI strategy depends on its software division winning the budget fight, but the company's infrastructure and consultancy segments may be draining dollars from its core valuation.