IBM's strong earnings: A trap for tech investors?

IBM (NYSE: IBM) had an astonishingly good quarter, especially given the poor state of IT spending. According to CNET, "IBM said earnings per share were at $2.05 for the quarter, up 22 percent from the same period last year. Net income rose 20 percent to reach $2.8 billion, while revenue rose 5 percent to $25.3 billion." Those numbers were higher than analyst estimates. Over the last two weeks a number of researchers who cover the company said they were looking for poor numbers. They were wrong. But their concerns did take IBM down to $90 from $115 just three weeks ago.

The IBM results might tempt investors to moving into other tech shares, especially those of firms which sell to big companies. Most of the stocks in these tech suppliers trade near 52-week lows.

But that would be a mistake. IBM is diversified across a very broad spectrum of international markets, has large hardware, software and services businesses, and has kept costs extremely low. The only tech company with comparable global businesses and remarkable margins is Microsoft (NASDAQ: MSFT).

IBM is the exception to the rule. Tech stocks are in bad shape because corporate spending is down. The great depth and breadth of Big Blue's business has let it dodge that bullet.

Douglas A. McIntyre is an editor at 247wallst.com.