IBM shares fell about 25% on Tuesday, July 14, the worst single-day decline in the company’s recorded trading history, after it took the unusual step of releasing preliminary second-quarter results eight days ahead of schedule. The drop erased roughly $67 billion in market value.

The move exceeded the company’s previous worst session, a 23.7% fall on October 19, 1987, during the Black Monday crash, according to records tracking back to 1968. More on the week’s corporate news is in our Financial News section at The Finance Reveal.

The Numbers Behind the Warning

IBM reported preliminary quarterly revenue of $17.2 billion, up roughly 1% from a year earlier but well short of the $17.85 billion analysts had expected. Adjusted earnings per share came in at $2.93 against a $3.02 consensus. Within the business, software revenue rose 5%, consulting was roughly flat, and infrastructure revenue declined 7%.

The contrast with the prior quarter sharpened the reaction. In the first quarter, IBM had beaten expectations with software revenue growing 11%, which is precisely why the shortfall unsettled investors who had bought into the company’s software-led growth story.

Management Points to Spending Shifts

Chief Executive Arvind Krishna attributed the miss to customers redirecting budgets late in the quarter toward servers, storage, and memory purchases, securing supply-constrained hardware ahead of anticipated price increases. He acknowledged the company had not adapted quickly enough and that several large deals failed to close on expected timelines.

The warning rippled outward. Shares of ServiceNow fell nearly 7% and Salesforce about 5%, while consulting firms Accenture and Cognizant dropped 8% and 7% respectively, as investors reassessed whether enterprise technology budgets are being reallocated toward artificial intelligence infrastructure at the expense of established software and services vendors.

What to Watch

IBM is scheduled to report full second-quarter results and provide third-quarter guidance on July 22, and analysts have flagged the free cash flow update as more consequential than the preliminary earnings figure. At least one brokerage cut its rating following the announcement, and most existing price targets predate the warning. For continuing coverage, see our Financial News section.

This article reflects market conditions as of mid-July 2026 and is provided for general information only. It is not investment advice, and market conditions change rapidly.