IBM is known for its software, hardware, and consulting. and has been listed on the New York Stock Exchange since 1916
International Business Machines (IBM) stock plunged 25% on Tuesday, marking the worst trading day in the company's history. The drop surpassed its previous record decline of 23.7%, recorded during the 1987 stock market crash.
The fall came as IBM reported adjusted earnings of $2.93 per share on $17.2 billion in revenue in the second quarter, missing Wall Street expectations of $3.01 per share and $17.86 billion in revenue.
IBM is known for its software, hardware, and consulting. and has been listed on the New York Stock Exchange since 1916.
CEO Arvind Krishna attributed the revenue shortfall to clients rapidly shifting their capital expenditure toward AI infrastructure like servers, storage, and memory chips ahead of anticipated price hikes.
Krishna told CNBC’s Sara Eisen that Anthropic’s advanced AI model, Mythos, is prompting people to pause and reconsider their cybersecurity spending, delaying other new tech deals.
However, he assured that “We don’t see our software being disrupted by AI at all.”
The disappointing second-quarter performance contrasts sharply with IBM's strong first quarter, when software revenue rose 11% to $7.05 billion. Meanwhile, semiconductor and memory companies such as Micron and SK Hynix continue to benefit from rising demand driven by the AI infrastructure boom.