IBM has lowered its full-year revenue growth forecast, citing a decisive shift in corporate spending patterns.
The technology giant indicated that customers are increasingly prioritizing capital expenditure on AI-focused data center infrastructure at the expense of traditional software and services contracts.
Shares tumbled more than 17% in premarket trading after the initial disclosure fell short of Wall Street expectations.
This strategic reallocation of IT budgets represents a significant headwind for IBM’s legacy software divisions, which have historically underpinned the company’s steady growth profile.
The announcement comes in the wake of a severe market reaction to IBM’s preliminary second-quarter results.
Shares tumbled more than 17% in premarket trading after the initial disclosure fell short of Wall Street expectations.
The stock subsequently fell sharply in regular US trading, marking one of the most severe single-day declines in the company’s history.