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IBM shares fall after weak outlook warning ahead of Q2 results
IBM said it expects weak second-quarter results and reported $2.93 per share on $17.2 billion in revenue, below FactSet forecasts of $3.01 and $17.86 billion.
IBM’s stock sank 25% on July 14, its worst single day since records began in 1968, after the company warned that its second-quarter results would be weak, leaving IBM’s total value just under $200 billion by the end of the week, according to Yahoo Finance.
In its earnings update, IBM reported $2.93 per share on $17.2 billion in revenue. Wall Street expected $3.01 per share and $17.86 billion in revenue, according to FactSet, the outlet reported.
CEO Arvind Krishna explained the slowdown in a letter to investors, saying that in late June customers began shifting spending toward servers, storage, and memory chips rather than IBM’s usual products. He added that buyers were looking to purchase AI hardware before prices rise.
Krishna also pointed to deal timing issues, saying several big deals did not close in time, and that Anthropic’s Mythos AI model has made some companies pause certain cybersecurity spending while they decide what they need, which has also held up some IBM deals, Yahoo Finance reported.
The company’s message to investors again emphasized that it does not see its software being disrupted by AI, echoing Krishna’s prior comments after an AI-related scare in February when investors worried about older software after Anthropic released a tool that rewrites COBOL code.