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IBM Shares Plunge 25% After Profit Warning Highlights Hardware Shift Impact
IBM's stock dropped 25.2% after CEO Arvind Krishna warned of weaker-than-expected revenue due to customers shifting investments to AI-related hardware. The company reported modest revenue growth but a 7% decline in infrastructure sales, reflecting changing market dynamics.
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What happened
- 01IBM shares fell 25.2%, losing $69 billion in market value after a profit warning.
- 02CEO Arvind Krishna cited a 7% drop in infrastructure revenue due to customers prioritizing AI hardware.
- 03IBM's total revenue rose 1% to $17.2 billion, with software up 5% and consulting flat.
- 04Analysts say IBM lags in cloud and AI transitions, impacting growth and investor confidence.
- 05Rising memory chip prices and cybersecurity concerns shift IT budgets away from IBM products.
- 06IBM employs over 300,000 globally, including about 1,500 in Israel, amid ongoing market challenges.
Analysts highlighted IBM's struggle to keep pace with tech sector growth and the impact on its legacy business.
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