IBM attributed part of its weak quarter to customers redirecting budgets toward servers, storage and memory amid supply constraints and expected price increases.
Microsoft faced the same component pressures—and much greater exposure to AI infrastructure costs—yet reported:
• 18% revenue growth
• 43% Azure growth
• 18% operating-income growth
• $59.3 billion in Microsoft Cloud revenue
• $41 billion of quarterly capital investment
IBM, by comparison, reported:
• 1% total revenue growth
• 5% software growth
• 7% infrastructure decline
• A reduced 4%–5% constant-currency growth outlook
This does not prove IBM customers experienced no budget pressure. It does suggest that memory shortages alone are an incomplete explanation.
Microsoft is absorbing higher infrastructure costs because customers are prioritizing its cloud and AI platforms. IBM appears to be losing spending because customers are prioritizing those platforms instead of IBM’s mainframes and traditional software.
That points less to a temporary supply-chain issue and more to a competitive-positioning problem.
[Microsoft results]
(https://www.microsoft.com/en-us/investor/earnings/fy-2026-q4/press-release-webcast) [IBM investor letter]
(https://newsroom.ibm.com/2026-07-14-Arvind-Krishnas-Letter-to-IBM-Investors) | [Yahoo Finance analysis]
(https://finance.yahoo.com/markets/article/microsofts-41-billion-ai-bet-just-cleared-a-major-test-chart-of-the-day-100000116.html)