IBM stock plunges 25% on weak AI-driven outlook
IBM shares fell 25.06% to $217.41 after projecting Q2 revenue of $17.2 billion, below the $17.86 billion analyst estimate.
IBM forecast adjusted earnings per share of $2.93, below the consensus estimate of $3.02.
Businesses are redirecting technology spending toward AI infrastructure like servers and storage, reducing expenditure on conventional software.
IBM CEO Arvind Krishna said customers shifted capital expenditure to servers and storage in late June, exceeding IBM's expectations.
IBM's update intensified investor concerns that AI adoption could weaken demand for traditional software products.
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