- Hedge fund manager Stanley Druckenmiller has called IBM (IBM -1.5%) one of the "more high probability shorts" he's seen in years, and declares Amazon Web Services (AWS) is "killing" the IT giant.
- He's also critical of Big Blue's slumping free cash flow, and its efforts to boost flagging growth via M&A.
- AWS is expected to pull in less than $4B in revenue this year, but is growing at a rapid clip. In addition, analysts have argued every IT dollar eaten up by cloud services results in a greater amount of on-premise IT spend being lost.
- IBM recently bought Web hosting/cloud infrastructure provider SoftLayer for a reported $2B in order to better take on Amazon, as well as rivals such as Microsoft, Google, VMware, and Rackspace.
- Though off its October lows, IBM remains down 5% YTD in a year during which the Nasdaq is up over 30%. Shares were hit hard last month by a Q3 revenue miss.
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