IBM’s share price has failed to recover today after a glum missive from its CEO yesterday wiped $67bn off its market value.
In a letter to investors, Arvind Krishna yesterday acknowledged that Big Blue “faltered” in its latest quarter ended 30 June 2026.
Mainframe sales came in lower than expected as clients redirected budgets to secure supply-constrained server and storage infrastructure ahead of expected price increases, he said.
On top of this, clients were “distracted with rapidly evolving, industry-wide cybersecurity concerns”, Krishna wrote.
IBM has enjoyed something of a rebound under Krishna, who took the helm in 2020.
But the news knocked 25.2% off the NYSE-listed giant’s shares, eclipsing the 23% slump it endured on 19 October 1987 (see here for more).
“These conditions require our teams to execute perfectly, and this quarter we faltered. We did not adapt and move quickly enough, and numerous large deals failed to close on the timelines we expected, driving the majority of our shortfall,” Krishna wrote.
IBM isn’t the only vendor giant to fall foul of Wall Street in recent weeks, with Oracle also seeing a fall in its share price amid concerns over its AI infrastructure spending.
IBM now expects Q2 revenue to rise 1% to $17.2bn, with Software up 5% , Consulting flat and Infrastructure down 7%.
An 11% rise in Red Hat revenues was among the bright spots highlighted by Krishna.
“While our second-quarter results are disappointing, our performance in many areas showed strength, reinforcing the conviction we have in our portfolio and strategy,” he concluded.
