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IBM stock plunges after Q2 revenue and EPS miss
IBM’s Q2 revenue fell short of expectations and management later said customer capital spending was reprioritized in June, with the July 22 earnings call now also facing a securities fraud inquiry tied to its sales pipeline.
IBM shares sank more than 25% in a single session after the company pre-reported Q2 2026 results on July 14, marking its worst one-day decline in company history. The sell-off set the stage for IBM’s official earnings report on July 22, where management can provide forward guidance and context around the weaker-than-expected figures.
Ahead of the call, IBM said Q2 revenue would be $17.2 billion, below analyst expectations of $17.9 billion, though up about 1% from $16.98 billion in Q2 2025. Adjusted earnings per share were forecast at $2.93, under estimates of $3.01 and only slightly above the $2.80 IBM reported in Q2 2025.
In explaining the shortfall, IBM pointed to customer decisions to reprioritize capital spending in June, including locking in prices on servers, storage, and memory before anticipated price increases. Market participants will be focused on whether IBM can clarify if the revenue gap was driven by deal timing, or whether the sales pipeline picture was less solid than it appeared.
The stakes for the upcoming earnings call are also elevated by a securities fraud inquiry related to whether IBM exaggerated its sales pipeline ahead of the July 14 preannouncement. While the inquiry does not establish wrongdoing, investors will be listening for evidence that delays pushed deals from Q2 into Q3 rather than deals that failed to materialize as suggested.