IBM's stock fell more than 25% on Tuesday after the company issued a profit warning and reported disappointing preliminary second-quarter results, wiping out roughly a quarter of its value.
Key facts
- IBM shares plunged more than 25% on Tuesday
- The company issued a profit warning after a weak second quarter
- Revenue for the three months ending in June was $17.2bn, up just 1% year-over-year
- The selloff spread to the software sector, including Microsoft
- The drop put IBM on track for a steeper single-day decline than the 1987 'Black Monday' crash
Shares in IBM plunged more than 25% on Tuesday after the US technology giant released disappointing preliminary second-quarter results, according to the Guardian. The steep drop wiped out roughly a quarter of the company’s value in a single session.
IBM issued a profit warning ahead of the selloff, blaming shifts in how its corporate customers are spending. The company said revenue for the three months ending in June came in at $17.2bn, an increase of just 1% year-over-year.
The scale of the decline was notable. The Guardian reported that IBM’s stock was on track for an even steeper single-day fall than it suffered during the 1987 ‘Black Monday’ crash, underscoring the severity of the market reaction to the company’s results.
The impact was not contained to IBM alone. The profit warning triggered a selloff across the wider software sector, with other major technology firms including Microsoft affected, according to the Guardian.
IBM described the quarter as weak and pointed to changing corporate spending patterns as a key factor behind its performance. The preliminary nature of the results suggests the company will provide further detail in its full earnings report.
Why it matters
IBM is one of the largest and oldest technology companies, so a sharp decline in its value and a warning about corporate spending can signal broader shifts in business technology demand. The spillover into other software stocks, including Microsoft, shows how a single company's results can ripple across the sector and affect investors more widely.
Frequently asked questions
How much did IBM's shares fall?
IBM shares plunged more than 25% on Tuesday, according to the Guardian, putting the stock on track for a steeper single-day decline than during the 1987 'Black Monday' crash.
What did IBM blame for its weak results?
IBM blamed shifts in its corporate customers' spending, issuing a profit warning after a weak second quarter.
What was IBM's revenue for the quarter?
IBM reported revenue of $17.2bn for the three months ending in June, up just 1% year-over-year.