IBM is preparing to close its $34 billion acquisition of Red Hat but Wall Street has 'real question marks' after its 'mediocre' quarter

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IBM will close its $34 billion acquisition of Red Hat this year, and analysts question about whether IBM can become a stronger player in hybrid cloud.

"They have an 'everything in the kitchen sink' approach to cloud," Andrew Bartels, vice president and principal analyst at Forrester, told Business Insider. They toss everything that might be related to cloud into that bucket. There's a lot of ambiguity and probably misdirection which is in their cloud numbers."

"That was a little disappointing for investors," Anwar told Business Insider."They were expecting they will see some clear improvements but that's obviously not the case. They're still struggling to compete in this cloud computing segment in which Amazon and Microsoft had a great run." And there's still some positives, says UBS lead analyst John Roy. He expects cloud and cognitive services at IBM to grow, and the company will also benefit from getting rid of underperforming assets of the company that slow down the business.

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