International Business Machines Corp. Stock Crashes 25% After AI Shift

Shares of International Business Machines Corp. plummeted approximately 25% on July 14, 2026, marking the largest single-day decline in the company's 115-year history and erasing nearly $68 billion in market value. The collapse followed a preliminary second-quarter report showing revenue of $17.2 billion and adjusted earnings per share of $2.93, both falling short of Wall Street estimates of $17.86 billion and $3.01 to $3.02, respectively.

CEO Arvind Krishna admitted the company "faltered" by failing to adapt quickly to a structural shift in enterprise spending. He explained that clients abruptly diverted budgets away from high-margin software and z17 mainframes to secure supply-constrained AI hardware, such as servers, storage, and memory, to avoid expected price increases. Additionally, the release of Anthropic PBC's Mythos AI model created cybersecurity concerns that stalled several large deals. While the distributed infrastructure business grew 37%, overall infrastructure revenue declined 7%.

The crash triggered a broader sell-off in enterprise software stocks, including Microsoft and Salesforce, as well as declines for Indian IT firms like Infosys and Wipro. In response to the volatility, some law firms have launched investigations into potential securities fraud regarding previous company guidance. To reassure investors, the company highlighted its $10 billion investment in quantum computing and the $5 billion Lightwell initiative to secure open-source software. Full second-quarter results are scheduled for release on July 22, 2026.