IBM Stock Collapses After a Grave Warning About AI

IBM shares plunged after the company warned that Q2 revenue and earnings would miss expectations, blaming a sudden shift in customer spending toward AI hardware instead of software services. CEO Arvind Krishna acknowledged that IBM faltered by failing to anticipate the magnitude of the capex reprioritization, leading to numerous large deals failing to close on time.

IBM shares plunged after the company warned that Q2 revenue and earnings would miss expectations, blaming customers' sudden shift in spending toward AI hardware instead of software services. However, CEO Arvind Krishna did not place all the blame on IBM's customers. The CEO also said it "faltered" by failing to "anticipate the magnitude of the capex reprioritization." "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." Fast Company reports: In the preliminary report, IBM said that for its second quarter of fiscal 2026, it expects revenue of $17.2 billion, which is up 1%. It also said it expects a Non-GAAP Diluted Earnings Per Share EPS of $2.93, up 5%. However, as noted by CNBC, these preliminary results are below what analysts were expecting, which was $17.86 billion in revenue, and an EPS of $3.01, according to FactSet data. Read more of this story https://hardware.slashdot.org/story/26/07/14/1634227/ibm-stock-collapses-after-a-grave-warning-about-ai?utm source=rss1.0moreanon&utm medium=feed at Slashdot.