IBM shares crash 25% in worst single-day drop since 1961 on profit warning

Published Jul 15, 11:53 AM UTC

IBM's stock suffered its worst single-day drop since 1961, falling 25% on Tuesday after a shock profit warning. The company pre-announced Q2 sales of $17.2 billion, below analyst estimates of $17.85 billion, and non-GAAP earnings of $2.93 versus $3.02 expected. CEO Arvind Krishna attributed the shortfall to a weaker-than-expected mainframe (z17) launch and client capex reprioritization toward servers and storage amid supply constraints and cybersecurity concerns. Analysts from Citi and Goldman Sachs expressed caution, with Goldman noting the mainframe shortfall reflects demand shifts toward near-term hardware purchases. Shares recovered slightly (+3.79%) in after-hours trading. The article concludes that IBM must deliver several strong quarters to regain investor trust.