2 months ago
- IBM CEO Arvind Krishna issued a warning causing shares to plunge 24% in premarket trading, nearing the company's worst day in its 115-year history.
- Customers rapidly shifted technology budgets towards AI datacenter components like servers and storage, reducing spending on IBM's new z17 mainframe.
- IBM struggled to adapt quickly, with preliminary sales growth of only 1% and unadjusted earnings per share falling 2%, both below forecasts.
- The surge in microchip prices due to high demand impacted customers' purchasing behavior, leading to a larger-than-expected capital expenditure reprioritization.
- Anthropic's Mythos debut distracted customers by raising cybersecurity concerns, pausing several large deals IBM anticipated closing in the quarter.
- IBM is innovating in response, launching Lightwell open-source security software, but acknowledged execution faltered amid challenging conditions.