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."