IBM shares plunged more than 22% in premarket trading after the company issued a weak second quarter forecast. The technology giant expects revenue of 17.2 billion dollars compared with Wall Street’s estimate of 17.86 billion dollars. Adjusted profit is projected at 2.93 dollars per share, missing the expected 3.01 dollars. The disappointing outlook triggered one of IBM’s steepest single day declines since the 1980s. The stock could lose nearly 70 billion dollars in market value if losses hold.
Chief Executive Arvind Krishna admitted that several large deals failed to close and customers shifted spending toward servers, storage and memory ahead of expected price increases. He said the reprioritisation of capital expenditure was far greater than anticipated. IBM also reported weakness in its mainframe division and noted that cybersecurity spending has gained priority as companies respond to new AI driven threats.
The selloff spread across the software sector. Workday fell 8%, ServiceNow dropped 7.7% and the broader technology software index slid more than 4%. Dow futures also turned lower after IBM’s warning. Analysts cautioned that the AI infrastructure boom is diverting budgets away from software, creating fresh challenges for traditional firms. IBM’s final results are due on July 22 but the early warning has already shaken investor confidence and raised concerns about future growth.