IBM
The quarter that tripped the alarm
IBM’s week started with a classic Wall Street mood swing: the company pre-announced preliminary second-quarter results that came in lighter than expected, and the stock promptly got absolutely mugged. Shares tumbled 25.21% in the worst single-day drop in IBM’s history, as investors digested a miss on both earnings and revenue.
The headline numbers weren’t exactly a warm hug:
- EPS came in at $2.93 versus a $3.02 estimate
- Revenue landed at $17.2 billion versus $17.9 billion expected
IBM blamed the miss on a shift in client capital spending and execution issues. Translation: customers got a little choosier with their checks, and IBM didn’t execute cleanly enough to smooth it over.
A shiny product drop can’t fully fix a bruised quarter
On Wednesday, IBM also rolled out new AI-powered Power systems and software, including the Power S1112 server, Power Autonomous Operations, and the Bob Premium Package for i. Nice launch, sure. But when a stock has just taken a historic body blow, even a flashy AI announcement can feel like putting a fresh coat of paint on a house with a cracked foundation.
IBM says some of the new software can resolve capacity constraints up to 15 times faster than manual intervention, and the company plans to make the Power S1112 generally available on July 24, with Power Autonomous Operations due on September 23. Those are the kinds of upgrades that matter over time — but they’re not the thing traders were staring at while selling first and asking questions later.
Analysts are doing their best impression of armchair quarterbacks
The Street is now reworking its math after the miss. BofA cut its 2026 revenue and earnings estimates, said it was surprised by the size of the topline miss, and trimmed its price target to $280 from $330. Other shops are chiming in too, with HSBC downgrading to Reduce, Oppenheimer sticking with Outperform, and Morgan Stanley landing at Equal-Weight.
Meanwhile, IBM is still set to report full earnings on July 22, 2026. So yes, the company already threw a preliminary punch, and now investors are waiting for the main event to see whether this was a one-round slip or the start of a deeper wobble.
Big picture
IBM isn’t broken, but the market is clearly re-pricing the story. When a mega-cap name gets hit this hard, the bar for the next earnings report becomes absurdly high — and that’s before you factor in whether the AI buzz is enough to offset the softer software and infrastructure outlook.