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IBM warns Q2 sales fell as deals missed expected timelines
IBM CEO Arvind Krishna said the shortfall stemmed from customers shifting spending toward memory and storage ahead of expected price increases.
International Business Machines said preliminary second-quarter results came in below expectations, with sales lower as customers redirected spending toward memory and storage products, according to Yahoo Finance.
In a shareholder letter, IBM CEO Arvind Krishna acknowledged that execution fell short, saying teams did not adapt quickly enough and that numerous large deals failed to close on the timelines IBM had expected.
IBM stock tumbled about 25% after the warning, and is down roughly 26% for 2026, while the company also highlighted that it has raised its dividend for 31 consecutive years, with a stated yield of 3.1%.
The report linked the spending shift to data center requirements for DRAM and NAND, noting that supply is expected to remain tight through the second half of the year, and said IBM is rolling out its new z17 mainframes to support AI workloads on the platform.