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IBM shares fall 26.5% in five sessions after cautious outlook
IBM said preliminary second-quarter revenue missed expectations at $17.2 billion, and it pointed to customers delaying spending as AI chip and server supply shortages persist.
IBM shares extended their sell-off after the company issued a cautious sales outlook, with the stock down 26.5% over the past five trading sessions and closing at $211 on Monday, after earlier plunging on 14 July.
The sharpest drop came when IBM reported preliminary second-quarter revenue that missed analysts' expectations, with revenue of $17.2 billion versus an estimated $17.9 billion. The company attributed the shortfall to customers shifting spending toward chips and servers while AI-driven supply shortages affect demand elsewhere.
Selling pressure continued in subsequent sessions, sending the shares to their lowest level since November 2024 before a modest rebound. IBM also said it is still reviewing its books and that next week's final results could differ slightly from the preliminary figures.
In particular, IBM's Infrastructure division, covering mainframe computers, saw weakness, with revenue declining 7% during the quarter. In an investor letter, CEO Arvind Krishna said customers were holding back spending and shifting toward servers, storage, and memory ahead of anticipated price increases, reflecting data center buildouts tied to artificial intelligence.