IBM shares fell sharply in US trading on Tuesday, marking the technology giant's most severe single-day decline since the 1987 market crash.
The stock dropped approximately 25% following the release of disappointing preliminary second-quarter results, which signaled that customer spending is increasingly shifting away from IBM's core infrastructure and software offerings toward artificial intelligence solutions.
The steep repricing reflects growing investor concern that the company's traditional business model is under pressure from the broader AI revolution.
As enterprises accelerate their adoption of generative AI, capital expenditure is being redirected from legacy systems to new AI-centric infrastructure, leaving established software providers like IBM vulnerable to margin compression and revenue stagnation.
This development intensifies the debate over the long-term viability of traditional IT service providers in an era dominated by AI-native competitors.
The sell-off serves as a stark reminder that even diversified tech giants are not immune to rapid shifts in enterprise technology priorities.