IBM shares plunged 23% on Tuesday after the company issued preliminary second-quarter results that missed Wall Street expectations, raising concerns about slowing demand for its software and consulting businesses.
The company reported adjusted earnings of $2.93 per share on revenue of $17.2 billion, below analysts' forecasts of $3.01 per share and $17.86 billion in revenue, according to FactSet.
According to Krishna, IBM underestimated the scale of that spending shift, while several major deals failed to close on schedule, contributing to the earnings shortfall.
The report said IBM had posted stronger-than-expected first-quarter results, supported by solid software revenue growth.
However, the latest warning comes as technology companies face increasing pressure from the AI boom, with memory manufacturers such as Micron and SK Hynix benefiting from rising infrastructure demand.
Related Tweet:
$IBM is down over 24%, its biggest one-day drop since 1987, after preliminary Q2 results missed estimates ($2.93 EPS vs. $3.01 expected; $17.2B revenue vs. $17.86B).
— Defiance Investments (@defianceinvest) July 14, 2026
The company cited software weakness as clients shifted spending toward servers, storage, and memory. $CRM $NOW… pic.twitter.com/T8ZQgJW8Es
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