Business & Markets
IBM shares drop after company says AI infrastructure spending shifted customer demand
IBM shares plunged 25 percent on Tuesday after the US technology company released preliminary second-quarter results that disappointed investors. IBM said customers changed their spending plans because they expected higher prices for memory chips and other artificial intelligence-related infrastructure.
IBM said revenue for the three months ending in June rose one percent to $17.2 billion. Chief executive Arvind Krishna told investors that the company "did not adapt and move quickly enough."
The company said the rush by technology firms to build AI infrastructure has increased demand for servers, memory chips and storage, pushing up prices and creating shortages across the industry. IBM said that near the end of June, many large corporate customers bought hardware ahead of expected price increases. It said that spending shift reduced demand for IBM's higher-margin mainframe computers and related software.
IBM's infrastructure business, which includes its mainframe line, recorded a seven percent revenue fall. Software revenue grew five percent but was still below expectations.
IBM also said cybersecurity concerns across the technology industry affected clients during the quarter. The company linked those concerns to the release of Anthropic's Mythos AI model, which it said has raised concern because of its ability to find weaknesses in computer networks that hackers could exploit. IBM said companies responded by building up cyber defenses instead of spending on previously planned projects.
Shares in some cybersecurity companies rose after the news. CrowdStrike rose 12 percent, while Okta and Netskope gained about 11 percent each. Shares in other software-as-a-service companies, including Salesforce, Adobe and Intuit, traded lower on Tuesday after IBM's warning.
IBM reported stronger results in some areas. Its Red Hat unit, which sells open-source software, posted 11 percent revenue growth. Its server and storage business outside mainframes rose 37 percent as clients bought that equipment.
IBM also announced Lightwell, a $5 billion initiative aimed at fixing vulnerabilities in open-source software. The company said the project has backing from major banks including Bank of America, JPMorganChase and Goldman Sachs.
Update
IBM shares were reported down 25 percent, compared with 24 percent in the supplied candidate headline.
IBM CEO Arvind Krishna told investors the company did not adapt and move quickly enough.
IBM said second-quarter revenue rose one percent to $17.2 billion.
IBM said infrastructure revenue fell seven percent, while software revenue grew five percent but missed expectations.
IBM said cybersecurity concerns linked to Anthropic's Mythos AI model affected client spending.
CrowdStrike shares rose 12 percent, while Okta and Netskope rose about 11 percent each, according to the report.
IBM said Red Hat revenue grew 11 percent and server and storage revenue outside mainframes rose 37 percent.
IBM announced Lightwell, a $5 billion open-source software vulnerability initiative backed by major banks including Bank of America, JPMorganChase and Goldman Sachs.
Source note: AFP news report published on 14 July 2026 at 21:17:28 UTC.
Update
IBM said its infrastructure business revenue fell seven percent and software revenue rose five percent but was below expectations.
The report says concerns followed Anthropic's release of the Mythos AI model, which raised alarm over its ability to find network weaknesses.
Analysts said some companies redirected spending toward cyber defenses.
IBM's Red Hat unit posted 11 percent revenue growth.
IBM's server and storage business outside mainframes rose 37 percent.
IBM announced Lightwell, a $5 billion initiative to address vulnerabilities in open-source software, with backing from major banks.
Source note: AFP news report published on 14 July 2026 at 18:42:31 UTC.
Update
IBM said second-quarter revenue was $17.2 billion, up one percent.
IBM said infrastructure revenue fell seven percent.
IBM said software revenue grew five percent but was below expectations.
IBM said Red Hat revenue grew 11 percent.
IBM said server and storage revenue outside mainframes rose 37 percent.
IBM said cybersecurity concerns distracted clients and several large deals did not close on time.
IBM announced Lightwell, a $5 billion initiative to address vulnerabilities in open-source software, backed by major banks including Bank of America, JPMorganChase and Goldman Sachs.
Source note: AFP news report published on 14 July 2026 at 14:08:11 UTC.
Update
IBM said the share fall followed disappointing preliminary second-quarter results.
IBM blamed a shift in customer spending linked to higher prices for memory chips and other computing infrastructure.
CEO Arvind Krishna told investors that IBM did not adapt and move quickly enough.
IBM said revenue for the three months ending in June was $17.2 billion, up one percent.
Source note: AFP news report published on 14 July 2026 at 13:55:44 UTC.
Uncertainty notes
The results described in the source are preliminary.
Source
AFP news report published on .