By Britney Nguyen and Hannah Pedone
Software stocks drop and chip stocks rally after IBM indicates that ramped-up client purchases of hardware mean less money to buy software
IBM's preliminary earnings results were bringing down the wider software sector on Tuesday while boosting stocks of companies that make hardware like chips and data storage.
Artificial intelligence may have already taken a bite out of software this year, but a profit warning from IBM indicates that it's hardware's turn to chow down.
As companies with software-as-a-service offerings struggle to fend off worries that AI will render their business models obsolete, investors have been piling into stocks of companies that make the hardware that is powering the tech transformation.
