IBM shares fell more than 17% in premarket trading after the technology company released preliminary second-quarter results that disappointed investors.
The firm reported adjusted earnings of $2.93 a share, a figure that fell short of analyst expectations and signaled potential headwinds in its core business segments.
The sharp decline in IBM stock dragged down broader market sentiment, with the Dow Jones Industrial Average opening under pressure as traders reassessed the tech sector's near-term outlook.
The sell-off reflects growing concern over IBM's ability to maintain growth momentum amid competitive pressures in the enterprise software and hybrid cloud markets.
This development marks a significant shift for IBM, which has previously been viewed as a stable performer in the large-cap technology space.
The earnings miss raises questions about the company's strategic execution and its capacity to deliver on long-term growth promises, particularly in high-margin software and consulting services.