Overview
- IBM pre-announced preliminary second-quarter results on Tuesday that showed about $17.2 billion in revenue and $2.93 adjusted EPS, figures that missed analyst expectations.
- CEO Arvind Krishna told investors the company “faltered,” saying numerous large deals failed to close on expected timelines and that execution shortfalls drove the majority of the quarterly shortfall.
- IBM said many clients shifted late-June capital spending into AI infrastructure—servers, storage and memory—to lock constrained supply, and that heightened cybersecurity concerns also delayed software deals.
- The warning sent IBM shares down roughly 25%, erasing about $67 billion in market value and pressuring other enterprise software stocks as investors weighed whether the spending shift is temporary or structural.
- IBM pointed to pockets of strength such as an 11% rise at Red Hat and announced strategic moves including the $5 billion Lightwell security effort and over $10 billion in planned quantum investment while full Q2 earnings on July 22 will clarify next steps.