Jul. 14 at 3:29 PM
$ADBE $CRM $IBM $NOW IBM Pulse, Tuesday, July 14, 2026
IBM is getting smoked Tuesday after pre-announcing weak Q2 results more than a week before its scheduled July 22 earnings call. Shares were down about 26% near
$215 late Tuesday morning, after opening at
$226.70 and falling as low as
$214.76. Volume already topped 30M shares before lunch, and Stocktwits had IBM as the No. 1 trending U.S. equity.
The numbers were not catastrophic on the surface, which is why the selloff looks so violent. IBM guided to Q2 revenue of
$17.2B, up 1%, but below the roughly
$17.8B-
$17.9B Wall Street expected. Adjusted EPS of
$2.93 also missed the roughly
$3.01-
$3.02 estimate. Software revenue rose 5%, consulting was flat, and infrastructure revenue fell 7%. Margins also softened, with GAAP gross margin down 100 bps to 57.7% and non-GAAP gross margin down 70 bps to 59.4%.
The explanation is the bigger problem. CEO Arvind Krishna said customers shifted spending toward servers, storage, and memory ahead of expected price increases, while cybersecurity distractions and several delayed large deals weighed on results. Translation: the AI boom is not lifting every enterprise-tech boat evenly. IBM’s customers are spending on the physical guts of AI infrastructure, but that appears to have crowded out some higher-margin software, consulting, and mainframe demand.
That is why the read-through matters beyond IBM. The company sits across software, consulting, infrastructure, financing, Red Hat, watsonx, mainframes, and quantum, so a miss like this touches a lot of market narratives at once. It can pressure IT services names like ACN and CTSH, enterprise software names like ORCL and MSFT, and infrastructure-budget names like HPE and DELL. The stock is also flirting with its 52-week low, with Stocktwits showing a range of
$212.34-
$332.46.
Stocktwits is split, but not quietly. The IBM room was 46% bullish and 54% bearish, with about 66.8K watchers and 210 messages in the wider 72-hour enterprise feed. Bears are focused on the pre-announcement, the deal delays, and the idea that IBM just exposed AI budget cannibalization. Bulls are arguing the drop is an overreaction, pointing to quantum, Red Hat, and price targets like Evercore’s
$310 call.
Best community color: @MonkeyBananaJabrone wrote that “
$50B in market cap erased in seconds” may be how earnings season plays out, with big winners and “huge losers.” @RotationReport said IBM has been lagging forever but argued the CEO letter still had “numerous positives.” @BNF2 noted IBM was on pace for its worst single-day drop ever, potentially worse than its 1987 Black Monday decline.
Net read: this is the first major AI-budget warning shot of earnings season. IBM did not just miss, it said customers are redirecting dollars toward memory, servers, and storage while higher-margin software and services got squeezed. The stock’s collapse says investors are not treating that as a one-quarter whoopsie yet.
