IBM CEO Blames AI Spending Shift for 25% Stock Plunge After Q2 Miss
IBM is trading near its 52-week low of $212.34 (3.1% above the low) on elevated volume (5.1× avg).
Summary
IBM shares cratered 25% after CEO Arvind Krishna warned that customer spending is rapidly pivoting from software to AI infrastructure — servers, storage, and memory — and the company failed to adapt fast enough. The pre-announced Q2 revenue of $17.2B (up just 1%) and GAAP EPS of $2.27 (down 2%) missed expectations, but the real shock is Krishna's admission that large deals slipped and the shift caught management off guard. This follows a pattern: despite a strong Q1 beat in April, the stock has been under pressure, and today's plunge pushes it near the 52-week low. The warning signals deeper structural headwinds for IBM's legacy software business as enterprise budgets reallocate to AI hardware, raising doubts about the quantum computing narrative that drove a May rally. With the stock now at $218.94, traders are repricing the entire transformation story.
At the time of this announcement, IBM was trading at $218.94 on NYSE in the Technology sector, with a market capitalization of approximately $205.9B. The 52-week trading range was $212.34 to $332.46. This news item was assessed with negative market sentiment and an importance score of 9 out of 10. Source: Reuters.