Overview
- On July 14, IBM issued a preliminary Q2 update that missed expectations with revenue of about $17.2 billion and adjusted EPS of $2.93, triggering a roughly 25% one‑day share drop.
- CEO Arvind Krishna told investors the company “faltered,” saying many clients pulled quarterly budgets into servers, storage and memory to secure scarce AI infrastructure and that numerous large deals failed to close on schedule.
- IBM reported infrastructure revenue down about 7% year‑over‑year while software rose roughly 5%, with Red Hat up about 11% and non‑mainframe server and storage growing strongly.
- The warning wiped roughly $67–70 billion of market value and pressured other software and consulting stocks, while analysts remain split on whether the miss is a timing issue or a durable budget shift.
- Investors now look to IBM’s full Q2 earnings and conference call on July 22 for detail on how much revenue was delayed versus permanently lost and what this means for enterprise software vendors and AI hardware suppliers.