Overview
- The company preannounced preliminary second‑quarter results that missed expectations and on Tuesday the stock fell about 25%, wiping roughly $67 billion to $70 billion from IBM’s market value.
- Arvind Krishna told investors customers pulled late‑June spending away from software and mainframes to buy servers, storage and memory to lock in scarce AI hardware, and he said numerous large deals failed to close on expected timelines.
- IBM reported preliminary Q2 revenue of $17.2 billion and adjusted EPS of $2.93 versus Street estimates near $17.86 billion and $3.02, with software up about 5% and infrastructure down about 7% year over year.
- The warning sent ripples through software and consulting stocks as analysts split on whether the miss is a timing issue tied to supply and deal timing or a deeper shift in enterprise budgets, and IBM will provide detail on July 22.
- IBM stressed its long‑term strategy by highlighting Red Hat growth, the $5 billion Lightwell cybersecurity effort and plans to invest more than $10 billion in quantum over five years, a stance that investors will test for credibility if spending priorities stay shifted to raw AI infrastructure.