IBM Slides 5% Premarket as CEO Flags Customers Scrutinizing AI Returns
IBM sits 20% above its 52-week low of $199.19.
Summary
IBM shares dropped 5% in premarket trading Thursday even after Q3 revenue rose 5% to $17.1B and adjusted EPS climbed 11% to $2.95, both above consensus. The pressure came from CEO Arvind Krishna's earnings-call remarks that large enterprises are increasingly focused on the "true ROI" of AI spending and worry some budgets could spiral without delivering returns. He stressed this does not undermine AI's potential, calling the productivity benefits "very real." The reaction matters because IBM has leaned heavily on AI narrative to support its valuation, and any hint of enterprise AI spending discipline cuts against that story. Roughly 557 ETFs hold IBM, with the First Trust NASDAQ Technology Dividend Index Fund (TDIV) among the heaviest at an 8.65% weighting, so the decline drags on dividend-tech funds too.
At the time of this announcement, IBM was trading at $239.00 on NYSE in the Technology sector, with a market capitalization of approximately $236.9B. The 52-week trading range was $199.19 to $332.46. This news item was assessed with negative market sentiment and an importance score of 7 out of 10. Source: Seeking Alpha.