IBM stock crashes 22% as AI spending shift hits software industry
IBM warned that AI infrastructure spending is reducing software budgets, causing second-quarter revenue to miss estimates.
IBM shares crashed 22% in regular trading, while the iShares Expanded Tech-Software Sector ETF dropped over 4%.
Customers shifted spending from software to AI infrastructure like servers, storage, and memory in late June.
CEO Arvind Krishna said IBM failed to adjust quickly to the changing spending pattern, with large customer deals not closing on time.
IBM expects second-quarter revenue of about $17.2 billion, below Wall Street's estimate of $17.86 billion.
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