IBM shares collapsed 25% in US trading on Tuesday, marking the technology giant's most severe single-day decline since the 1987 market crash.
The sell-off followed the release of disappointing preliminary second-quarter results, which revealed a significant disruption in business operations.
The company attributed the weak performance to a shift in customer spending patterns.
Clients are reportedly pulling back or delaying investments due to expected higher prices for memory chips, a critical component in AI infrastructure.
This suggests that the broader AI spending boom may be facing headwinds from supply-side cost pressures, rather than demand-side fatigue.
The magnitude of the drop underscores investor anxiety over the sustainability of AI-related revenue streams when input costs rise.