After issuing a "sell" rating on shares of IBM, Credit Suisse Managing Director Kulbinder Garcha said Tuesday that three technology stocks held much greater potential.
"If you take into account M&A over the last two years, and they'vedone about 50 deals since 2010, the actual business is organically in decline,"he said.
On CNBC's "Fast Money," Garcha said that the company faced three major headwinds.
First, he said that IBM had "a very high mainframe and Unix exposure on the server side," noting that it accounted for 7 percent of revenues but as high as one-third of gross profits when factoring in the related software business.
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Secondly, he said that IBM had "a science about acquiring," noting that the company had acquired about 50 companies on revenue of about three times.
"The problem is the small cap software sector today is trading at a level of closer to five times, so we don't even think necessarily it's as easy for them to acquire their way out of it," Garcha added.
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"Organically the top line growth of the business is shrinking, and we think we've proven that."
Garcha said that three tech stocks appeared strong.
"We think in a recovering IT spending environment, EMC has superior revenue growth, better exposure to storage. They can gain share in that segment and expand marigns," he said.
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Garcha also said that EMC was friendlier to shareholders, committing to returning 16 percent of the company through buybacks and dividends.
Trader disclosure: On Aug. 6, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Jon Najarian is long AAPL; Jon Najarian is long EBAY; Jon Najarian is long MGM; Jon Najarian is long TMO; Jon Najarian is long UNH; Jon Najarian is long WLL; Jon Najarian is long PPO; Jon Najarian is long SKUL; Simon Baker is long AAPL ; Simon Baker is long MS; Simon Baker is long GOOG; Simon Baker is long AMZN; Simon Baker is long NFLX; Simon Baker is long KORS; Simon Baker is long SNE; Josh Brown is long AAPL; Josh Brown is long KORS; Michael Murphy is long BAC; Michael Murphy is long C; Michael Murphy is long ADM; Kimberly Greenberg is long AAPL; Kimberly Greenberg is long KORS.