IBM reported preliminary second-quarter results on 14 July 2026 that fell significantly below market expectations, triggering a share price decline of over 25% — the worst single-day performance for the stock in nearly four decades, and by some accounts its worst in close to six decades. The company posted Q2 revenue of $17.2bn, representing only 1% year-over-year growth. IBM's CEO attributed the shortfall to weakness in the software and infrastructure segments, as corporate clients reallocated budgets toward hardware, chips, and servers amid AI-driven demand, with some customers frontloading memory purchases ahead of anticipated price increases.
IBM shares fell more than 25% on the day of the announcement, marking one of the most severe single-session declines in the company's history. The selloff extended into the broader software sector, with Microsoft also recording weakness on the same session.
IBM is the enterprise technology and IT services company directly at the centre of this earnings event. Microsoft, as a major software peer, recorded concurrent share price weakness attributed to the sector-wide selloff triggered by IBM's results. The iShares Expanded Tech-Software Sector ETF (IGV) and broader software indices declined as IBM's miss raised questions about enterprise software spending patterns.
Sources: Guardian Business, Marketwatch TOP, Cnbc TOP, Bloomberg Markets