Business
IBM shares suffer worst drop since 1987 after profit warning
July 15, 2026 at 12:56 PM
IBM shares plunged 25% on July 14, 2026, wiping out about $68 billion in market value after the company warned that customer spending had shifted sharply toward AI hardware.
- IBM stock fell 25.2% to close at $217.05, exceeding the 23.7% drop on Black Monday 1987, according to Forbes.
- CEO Arvind Krishna said in a letter to investors that IBM failed to adapt quickly enough and that many large deals were not completed on time.
- Second-quarter preliminary revenue of $17.2 billion missed analyst expectations of $17.8 billion, as infrastructure revenue declined 7% while software revenue rose 5%.
- Krishna attributed the shortfall to customers reordering capital spending toward servers, storage, and memory for AI applications, away from IBM's software and mainframes.