IBM $IBM drops 23% after Q2 warning; revenue seen at $17.2B

IBM $IBM fell more than 20% after the company warned that second-quarter results would miss Wall Street expectations. AP and CNBC reported preliminary revenue of $17.2B and adjusted EPS of $2.93, below FactSet consensus of $17.86B in revenue and $3.01 in adjusted EPS.

The move meets the single-stock Tier-1 threshold because the price reaction was larger than 8% and tied to a specific earnings catalyst. AP reported a premarket decline of more than 23%, while MarketWatch estimated that IBM alone accounted for about 330 points of Dow Jones Industrial Average pressure before the open.

The operating details were concentrated in spending mix and deal timing. IBM reported 1% revenue growth, but infrastructure revenue fell 7%, software rose 5%, and consulting was flat, according to the investor-letter figures summarized by StockTitan and wire reports. GAAP EPS was listed at $2.27, down 2%, while operating EPS rose 5% to $2.93.

CEO Arvind Krishna attributed the shortfall to customers shifting budgets toward servers, storage, and memory ahead of expected price increases, plus several large deals that did not close on time. That detail matters because IBM has been treated as an AI-infrastructure and enterprise-software beneficiary; a miss caused by budget diversion challenges that narrative.

The next scheduled primary event is IBM's second-quarter earnings call on July 22 at 5:00 p.m. ET. Investors will be watching whether management updates full-year guidance, quantifies delayed deals, and separates AI demand from traditional infrastructure weakness.

Primary event page: IBM 2Q 2026 earnings announcement. Market reports: AP, CNBC.

Not investment advice. Verify all figures with primary sources before acting.