Why IBM Stock Is Crashing

International Business Machines Corp. (NYSE: IBM) shares crashed roughly 24% on Tuesday, July 14, 2026, after the company released preliminary second-quarter results that missed Wall Street expectations on both the top and bottom lines. IBM guided to Q2 revenue of $17.2 billion, up just 1% year-over-year and below the $17.86 billion analyst consensus compiled by LSEG. Adjusted (non-GAAP) earnings per share are expected to come in at $2.93, missing the $3.02 estimate, while GAAP EPS was down 2% year-over-year. In a letter to investors, IBM CEO Arvind Krishna called the results "disappointing" and said the company "faltered" in adapting quickly enough to changing market conditions, adding that IBM's teams "did not adapt and move quickly enough." Krishna attributed the miss primarily to weakness in the IBM Z mainframe business and its associated software stack, and to a late-quarter shift in enterprise capital spending: clients pulled forward purchases of servers, storage, and memory ahead of expected price increases, contributing to numerous large deals failing to close on the timelines IBM expected. By segment, infrastructure revenue declined 7%, software rose 5%, and consulting was flat. Reuters characterized the shortfall as reflecting an industry-wide shift in technology budgets toward AI infrastructure at the expense of traditional enterprise software. The warning triggered a broader selloff across IT services and enterprise software names. ServiceNow (NYSE: NOW) fell about 6%, Salesforce (NYSE: CRM) dropped roughly 3%, Accenture (NYSE: ACN) slid 3.6%, SAP (NYSE: SAP) lost 3.8%, Cognizant (NASDAQ: CTSH) fell 2.8%, Microsoft (NASDAQ: MSFT) was down 2.1%, and Oracle (NYSE: ORCL) traded 1% lower. Evercore ISI Group analyst Kirk Materne maintained his Outperform rating on Salesforce but cut his price target from $260 to $250, following KeyBanc's downgrade of the stock to Sector Weight last week. Salesforce carries a consensus Buy rating with an average price target of $243.21. Salesforce and IBM have maintained a 24-year partnership spanning joint AI initiatives, including integration between Salesforce's Einstein platform and IBM's watsonx AI capabilities, and a Zero Copy integration linking IBM Z mainframe data with Salesforce Data Cloud. --- #IBM #stocks #AI 🌐 Find more market-moving insights at https://www.benzinga.com — your one-stop destination for the latest financial news, data, and expert analysis to stay ahead of the markets. 🖥️ Want the same tools the pros use—without the $10K Bloomberg terminal? Benzinga Edge gives you real-time portfolio alerts, weekly stock picks, and pro-grade research in one command center. 👉 https://bit.ly/4unSKiB ------------------------------------------------------------------------------------ 📲 Follow us on socials @benzinga 🔔 Subscribe To The Channel: https://www.youtube.com/@Benzinga ------------------------------------------------------------------------------------ ⚠️ Disclaimer: Investing in financial markets carries risk, and there are no guaranteed returns. All information is for educational purposes only and should not be taken as financial advice. Always do your own research and speak with a qualified financial advisor before making investment decisions. Only invest what you can afford to lose. Past performance does not guarantee future outcomes.