Escalation: Ibm Shares Plunge 25% on Earnings Warning

On July 14, 2026, IBM shares plunged about 24%–25% after the company issued disappointing preliminary second-quarter results that missed Wall Street estimates on revenue and earnings.

CEO Arvind Krishna, in a letter to investors Tuesday, wrote "This quarter we faltered" and added "We did not adapt and move quickly enough" as the company warned on Q2 performance.

Trading fallout was swift: options volume in IBM surged and HSBC cut its rating on the stock following the warning. Broader U.S. markets were mixed, with the Nasdaq rising on softer June CPI even as IBM slumped.

The Financial Times reported customers redirected spending to AI-related servers and storage, and the Wall Street Journal said weakness in IBM’s infrastructure arm was worse than anticipated as clients shifted to hardware and memory. Pluang added that IBM warned of slowing growth as AI pushes corporate budgets toward data-center infrastructure.

There was disagreement on the magnitude and record of the drop: Business Insider and the Wall Street Journal called it the biggest single-day decline in IBM’s history, while MLQ said it was the worst since 1987 and IndexBox described it as the steepest in decades. Several outlets pegged the slide near 25%, others around 24%, and a Wall Street Journal update earlier in the session noted an 18% intraday fall.

AI-synthesized from multiple reported sources