IBM loses quarter of its value as tech giant's shares plunge and profits falter
16 hours ago
- #IBM stock plunge
- #AI infrastructure shift
- #software sector selloff
- IBM shares dropped over 25% after disappointing Q2 results, worse than the 1987 Black Monday crash.
- Revenue reached $17.2bn, up only 1% year-over-year, missing analyst forecasts of $17.86bn.
- IBM blamed a shift in corporate spending from software to data center infrastructure and cybersecurity.
- The AI-driven demand for servers and storage led customers to buy hardware ahead of expected price increases.
- This shift reduced spending on IBM's higher-margin mainframes and software, impacting large deals.
- Adjusted earnings per share were expected at $2.93, below the $3.02 analyst estimate.
- The warning caused a selloff in software stocks, with Microsoft, ServiceNow, Salesforce, and Intuit falling 3-5%.
- Investors worry AI automation could threaten the software industry long-term.