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IBM Bets the Farm On the Cloud

Purchase of Red Hat was part of strategic initiative to branch out into the lucrative and burgeoning cloud computing services sector

During the latter part of last year, IBM’s shares have been beaten down over 26%, as the company missed sales estimates for two consecutive quarters and faced skepticism concerning its plans to diversify into other business lines to help rekindle its lackluster growth. Although the company’s revenue increased last year, most of that growth was attributable to the introduction of a new mainframe system. That business dropped 41% in the fourth quarter.

An examination of the chart below highlights how revenue for the company crash-dived during 2018, after cresting at a peaking in 2017.

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