IBM Slashes 2026 Revenue Outlook as Mainframe Sales Plunge 42%
IBM is trading near its 52-week low of $204.44 (0.9% above the low).
Summary
IBM cut its 2026 revenue growth forecast to 4-5% from over 5%, with the midpoint below consensus, as Q2 results missed across the board. Revenue of $17.16B and adjusted EPS of $2.93 fell short of estimates, driven by a 42% collapse in Z mainframe sales that dragged infrastructure revenue down 7%. CFO Kavanaugh said the mainframe impact was over five points, far worse than the expected one to two points, and that the low end of the revenue guide should anchor expectations. This follows the July 14 pre-announcement that triggered a historic 25% single-day share plunge. The guidance cut confirms the AI spending shift is hitting IBM's legacy hardware harder than management anticipated, with no quick fix in sight.
At the time of this announcement, IBM was trading at $206.20 on NYSE in the Technology sector, with a market capitalization of approximately $193.4B. The 52-week trading range was $204.44 to $332.46. This news item was assessed with negative market sentiment and an importance score of 9 out of 10. Source: Reuters.