Mumbai–IBM shares plunged 23% in premarket trading Tuesday after the technology giant released preliminary second-quarter results that missed market expectations, sparking a broader sell-off in software and IT services stocks.
The decline erased nearly $55 billion from IBM’s market value. If the losses hold during regular trading, the drop would represent the company’s steepest intraday decline since the 1980s.
International Business Machines Corp. said preliminary second-quarter revenue fell short of analysts’ forecasts because of weakness in its software and infrastructure businesses.
The company said customers were redirecting technology spending toward artificial intelligence infrastructure, including chips and servers, while reducing expenditures on traditional software.
IBM’s infrastructure division was particularly affected, with revenue falling 7% during the quarter.
The company said it was continuing to review its financial statements and cautioned that its final results could differ slightly from the preliminary figures.
IBM’s update weighed on the wider technology sector in premarket trading. Oracle shares fell 2.3%, while ServiceNow declined 6.8%. Accenture dropped 8.5%, Adobe fell 4.8% and Cognizant was down 7%.
The sell-off also affected Indian technology companies listed in the United States. American depositary receipts of Infosys fell nearly 9% in premarket trading, while Wipro’s ADRs declined about 3%.
Despite losses in individual technology stocks, Nasdaq futures recovered some ground after the technology-heavy Nasdaq Composite fell 1.6% in the previous trading session.
IBM’s preliminary results highlighted the continuing shift in corporate technology spending toward AI infrastructure and away from conventional software and legacy IT systems, increasing pressure on companies with substantial exposure to traditional technology businesses. (Source: IANS)
