IBM shares fell more than 17% in premarket trading after the technology company disclosed preliminary second-quarter results that missed analyst expectations.
The company reported adjusted earnings per share of $2.93, a figure that failed to meet the consensus estimates driving the stock's valuation.
The disappointment triggered a broad sell-off, with IBM's decline dragging down the broader market, particularly the Dow Jones Industrial Average, which opened with mixed signals amid the tech giant's downturn.
The sharp repricing reflects investor frustration with the company's near-term profitability.
While IBM has been navigating a transition toward higher-margin hybrid cloud and AI services, the latest earnings print suggests execution challenges or margin pressure in the current quarter.
The miss comes at a time when investors are scrutinizing tech earnings for signs of slowing growth or cost overruns, making the shortfall particularly damaging to sentiment.