What happened Shares of IBM (NYSE: IBM) soared almost 10% this morning, before settling back with a gain of 7% as of 11:00 a.m. EDT. The jump brought the share price to a four-month high. So what The company announced it will spin off its managed infrastructure services business into a separate new company. The spinoff, which will be tax-free to existing IBM shareholders, is expected to be completed by the end of 2021. IBM hasn't revealed the name of the new company yet. Image source: Getty Images. IBM says in its statement that the newly formed company will be the top provider of managed infrastructure services globally. But the portion of the business that remains is what has investors excited today. Now what What many investors had come to see as a legacy tech company made a splash by acquiring Linux vendor Red Hat in 2019. The $33 billion acquisition brought a lot of debt, but also gave IBM a new direction in the cloud computing market. With the spinoff announced today, the company is turning its hybrid cloud business into a single business focus. Investors are cheering the move, which allows the company to focus on what it says is a $1 trillion market opportunity. The potential growth is in contrast to slowing software sales and its cyclical mainframe server business. In describing the thought process behind the separation, CEO Arvind Krishna said in the release, "Client buying needs for application and infrastructure services are diverging, while adoption of our hybrid cloud platform is accelerating." By focusing on its open hybrid cloud and artificial intelligence solutions, the company says it will have more than half its revenue in "high-value cloud software and solutions," much of which comes as recurring revenue. 10 stocks we like better than IBMWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and IBM wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of September 24, 2020 it Howard Smith has the following options: long January 2022 $145 calls on IBM and short October 2020 $130 calls on IBM. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source