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IBM Stock Craters 24% After Rare Earnings Warning, Worst Day Since 1987
The warning sent shares down nearly 22% and erased about $60 billion in market value as clients shifted spending late in the quarter.
- IBM shares plummeted nearly 22% on Tuesday after issuing a rare preliminary earnings warning, erasing nearly $60 billion in market value and marking the stock's worst single-day performance since 1987.
- CEO Arvind Krishna attributed the shortfall to clients shifting capital spending toward AI-related hardware in late June, stating the company "did not anticipate the magnitude of the capex reprioritization."
- Infrastructure revenue fell 7% for the quarter, while IBM reported adjusted earnings of $2.93 per share on $17.2 billion in revenue, missing analyst consensus estimates of roughly $3.01 per share.
- Broader enterprise software shares dropped as investors priced in budget shifts, with Workday falling roughly 10% and Salesforce losing more than 6%; Goldman Sachs analysts said the miss "plays directly into the software bear case."
- Full second-quarter results are scheduled for July 22, when investors will seek clarity on whether the capex reallocation signals a durable squeeze on corporate software budgets or represents a one-quarter timing issue.
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Total News Sources30
Leaning Left3Leaning Right5Center2Last UpdatedBias Distribution50% Right
Bias Distribution
- 50% of the sources lean Right
50% Right
L 30%
C 20%
R 50%
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