Overview
- IBM confirmed a material Q2 miss on July 22, reporting $17.16 billion in revenue and adjusted EPS of $2.93, both below Wall Street expectations.
- Z mainframe revenue plunged about 42% in the quarter and drove a significant portion of the shortfall that lowered full‑year revenue growth guidance to 4%–5%.
- Executives blamed timing of ‘large capex’ deals at major clients who redirected spending to servers and memory for AI deployments and said roughly one‑third of those delayed deals have since closed.
- To protect margins the company raised its cost‑savings target above $5.5 billion and built inventory, with inventory rising roughly $600 million year over year to hedge supplier price increases.
- Markets and analysts remain skeptical and have repriced IBM stock since a July 14 preannouncement, leaving the company dependent on a clearer recovery in mainframe and software bookings in the second half.