Markets IBM JUL 15, 2026

IBM craters 25.2% after Q2 warning, worst single-day drop on record

Preliminary Q2 revenue of $17.2B missed by $660M as customers redirected capex to memory and servers ahead of price hikes; $67B in market cap gone.

BY HENLEY MARRAST · MARKETS DESK

IBM shares closed down 25.2% on Tuesday after the company issued an unscheduled preliminary Q2 release, wiping roughly $67 billion from a $272.78 billion market cap in a single session, according to Reuters. It’s the steepest one-day decline in the company’s public history, a comparison that reaches back past Black Monday in 1987.

The proximate cause is legible enough. Preliminary Q2 revenue came in at $17.2 billion against a Street consensus of $17.85 billion, a miss of about $660 million. Adjusted EPS printed at $2.93 versus $3.01 expected. The full print lands July 22.

The explanation from CEO Arvind Krishna, delivered in a letter to shareholders, is more interesting than the miss itself. “In the last few weeks of June, we saw clients shift their quarterly capex spend toward servers, storage, and memory purchases to secure supply-constrained infrastructure ahead of expected price increases,” Krishna wrote, conceding that IBM had “faltered” in keeping pace with the shift.

Translation: enterprise buyers are hoarding memory. DRAM prices rose between 100% and 116% in Q1 2026 and are forecast to climb as much as 355% across the full year. SK Hynix has said its DRAM and NAND capacity is “essentially sold out” for 2026. Intel’s CEO has warned there’s “no relief until 2028.” CIOs, presented with that forecast, are front-running the price curve and starving software and consulting line items to do it.

The segment breakdown, per Forbes, tracks the theory. Infrastructure revenue fell 7%. Software grew 5% against a double-digit internal target. Consulting was flat. Total revenue crept up 1% year-on-year.

The contagion was immediate. Seeking Alpha flagged premarket declines across MSFT, NOW, CRM, ACN, CTSH, ADBE, WDAY, HUBS, and DDOG. Per TheStreet, one bank cut its IBM target and pointed clients toward competitors; another lifted its target the same morning.

“This is an ugly moment for IBM and software stocks,” said Chris Beauchamp, chief market analyst at IG Group. “A few more months might be bearable, but more than that and serious questions will be asked all over again about software stocks.”

The unspoken question is whether the AI infrastructure buildout is quietly cannibalizing the software budgets that were supposed to monetize it.

Sources

About the author

Henley Marrast

MARKETS DESK

Henley Marrast covers AI-equity flow, accelerator demand, and earnings prints for AI Sheet Report. She leads coverage of the public AI complex from the New York markets desk, with a focus on the daily tape and quarterly results. She has been writing about technology markets for several years.