IBM Slashes Full-Year Outlook as Mainframe Sales Plunge 42%
IBM is trading near its 52-week low of $204.44 (0.3% above the low).
Summary
IBM cut its 2026 revenue growth forecast to 4-5% from over 5%, with the midpoint below consensus, as mainframe sales plummeted 42% in Q2. The software unit is now expected to grow 6-8% annually, a key metric for the company's pivot. CFO Jim Kavanaugh detailed cost-saving measures targeting $1B in additional free cash flow, including reduced third-party spending and supply chain efficiencies, while keeping headcount flat. CEO Arvind Krishna defended the mainframe business as a temporary pause, not a structural shift, but shares erased initial after-hours gains. This follows the July 14 pre-announcement that triggered a historic 25% single-day drop, and the new details on mainframe weakness and software guidance add depth to the ongoing narrative of IBM's challenged transition.
At the time of this announcement, IBM was trading at $205.00 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 8 out of 10. Source: CNBC TV18.