Why is IBM stock crashing today? Shares plunge over 25% - here’s what’s driving the fall
IBM shares dropped over 25% after the company reported lower-than-expected quarterly revenue, citing a shift in customer spending toward AI infrastructure. The decline triggered a broader sell-off across the software sector as investors worry about changing market demands.
Why it matters
The shift in capital expenditure from traditional software to AI hardware signals a major transition in the tech industry's business model.
IBM stock price crash: IBM shares tumbled on Tuesday after the company indicated that its second-quarter revenue would likely fall short of Wall Street expectations. Based on preliminary results, IBM projected quarterly revenue of $17.2 billion, compared with analysts' estimate of $17.86 billion, according to LSEG data. The company's shares dropped 25.06% to $217.41.IBM also forecast adjusted earnings per share of $2.93 for the quarter, below the analysts' consensus estimate of $3.02.Why IBM share price is down today?Following the announcement, the stock plunged by as much as 23% in premarket trading. The weakness spread across the broader software sector, with shares of Microsoft, ServiceNow, Salesforce and Intuit declining between 3% and 5%.
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