IBM (NYSE: IBM) stock closed down more than 25% on July 14, at $217.07, marking the largest single-day drop since at least 1968. The decline was triggered by the company’s pre-announced earnings coming far below Wall Street expectations: adjusted EPS of $2.93 (vs. $3.02 expected) and revenue of $17.2 billion (vs. $17.86 billion expected).
IBM earnings: EPS of $2.93 and $17.2 billion revenue both miss expectations
According to reports, the gaps between IBM’s pre-announced earnings and market expectations are as follows: adjusted EPS of $2.93 (vs. $3.02 expected, down 3%); revenue of $17.2 billion (vs. $17.86 billion expected, down about 3.7%).
IBM CEO Krishna said the company had previously expected that its z17 mainframe business would decline by a high single-digit percentage in the quarter, but the actual results were far worse than expected. “At least in part, it’s related to the global memory shortage.”
Ashish Nadkarni, head of IDC’s global research team for enterprise infrastructure, said in a statement that Wall Street’s reaction to this warning may be too strong, but it does mean “IBM also can’t stay outside of strategic reallocation of enterprise budgets.”
Mechanism behind customers rushing to memory beyond IBM’s expectations
According to Krishna’s explanation, the core mechanism behind the results missing expectations this time is that in the last few weeks of June, customers expected memory and server infrastructure prices to rise (partly tied to the global memory shortage). As a result, they placed large orders early for AI servers, storage, and memory—leading to quarterly capital expenditures originally allocated to IBM software and mainframe products being redirected.
This development hit IBM’s mainframe business harder than expected. As a result, IBM’s stock’s decline year-to-date widened from 4.8% to about 26%. The performance of competitors is as follows:
Oracle (ORCL): down 33% year-to-date
Microsoft: down 20% year-to-date
Accenture (ACN): down 50% year-to-date
FAQ
Why did IBM stock plunge 25% in a single day on July 14, 2026?
According to reports, the direct trigger was IBM’s pre-announced Q2 earnings coming in below Wall Street expectations: adjusted EPS of $2.93 (vs. $3.02 expected) and revenue of $17.2 billion (vs. $17.86 billion expected). The main reason was that by the end of June, customers shifted large amounts of capital expenditures to AI servers and memory—far exceeding IBM’s expectations—plus the impact of the global memory shortage, causing the mainframe business to fall more than anticipated.
When will IBM release its full Q2 financial report, and will there be more details?
According to reports, IBM’s Q2 earnings call is scheduled for July 22, 2026. The pre-announced earnings are preliminary numbers, while complete financial details and management commentary will be released officially on July 22, based on that day’s official earnings report.
How have IBM’s competitors’ stocks performed this year?
According to reports, IBM stock is down about 26% year-to-date. Among peers, Oracle (ORCL) is down 33%, Microsoft is down 20%, and Accenture (ACN) is down 50%. The report says these declines reflect systematic pressure facing the enterprise IT sector as customers reallocate budgets toward AI infrastructure. For specific real-time share prices, refer to market quotes.
