IBM shares plunge 25% on weak Q2 results and cautious CEO outlook

The tech giant's stock suffered its worst single-day drop since 1987 as disappointing preliminary figures and conservative guidance from Arvind Krishna triggered a sector-wide sell-off.

By Handelsavisen Newsroom · Automated 2026-07-16 16:10 UTC · 1 min read Last updated: 2026-07-16 20:52 UTC

IBM shares collapsed 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 and cautious forward-looking statements from CEO Arvind Krishna, which spooked investors and weighed heavily on the broader IT sector.

The stock plunged approximately 25% to 26% in the session, a move that underscores the market's low tolerance for execution risk among legacy tech names.

The stock plunged approximately 25% to 26% in the session, a move that underscores the market's low tolerance for execution risk among legacy tech names.

The sharp repricing reflects a sudden loss of confidence in the company's ability to deliver on its transformation narrative, particularly as growth expectations had been elevated ahead of the report.

This development stands in stark contrast to the broader market's recent focus on AI infrastructure spending.

While peers have benefited from the generative AI boom, IBM's preliminary data suggests that monetization challenges or margin pressures may be more acute than previously assumed.