IBM Stock Crashes 25% as Q2 Earnings Miss Analysts' Forecasts

IBM shares plunged 25% on July 14, the company's worst single-day performance in its 115-year history . The rout followed a disappointing Q2 earnings report in which IBM blamed lower-than-expected revenue on customers redirecting spending toward AI and cybersecurity infrastructure ahead of anticipated price increases . CEO Arvind Krishna acknowledged the company was slow to adapt to the shift and that several large deals slipped past their expected close timelines .

The warning rippled across the sector, dragging down other software and IT-services names as investors read the miss as evidence of a broader budget reallocation rather than a company-specific stumble. As AI investment accelerates, enterprises are prioritizing memory chips, servers and storage for AI infrastructure, leaving thinner budgets for traditional software and consulting .

For IBM, the reset underscores a new phase of the AI spending boom in which some vendors win at the expense of others. The near-term question is whether the slipped deals close in the second half, which would frame the drop as timing-driven, or whether the spending mix has structurally moved away from IBM's core.

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