IBM Wipes Out $69B in Market Value as AI Spending Shift Hammers Q2
IBM is trading near its 52-week low of $212.34 (3.3% above the low) on elevated volume (6.7× avg).
Summary
IBM shares plunged 25% on Tuesday, erasing $69 billion in market cap — the largest single-day drop in the company's history. The selloff follows a rare profit warning pre-announcing Q2 revenue of $17.2B (up only 1%) and GAAP EPS of $2.27 (down 2%), both missing expectations. CEO Arvind Krishna said clients abruptly shifted capital expenditures toward servers, storage, and memory to lock in supply-constrained AI infrastructure ahead of price hikes, crowding out spending on IBM's traditional software and services. The flagship z17 mainframe also fell short, with infrastructure revenue now expected to decline 7% versus prior guidance of a low-single-digit drop. This is the third high-impact headline on IBM today, each adding depth to the narrative that enterprise AI adoption is directly cannibalizing legacy IT budgets. The official Q2 report is due next week, but the pre-announcement and management commentary have already reset expectations sharply lower.
At the time of this announcement, IBM was trading at $219.30 on NYSE in the Technology sector, with a market capitalization of approximately $204B. 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: Dow Jones Newswires.