IBM Shares Plunge 23% in Premarket Trading, Erasing $55 Billion in Value
Mumbai–IBM shares plunged 23% in premarket trading Tuesday after the technology company released preliminary second-quarter results that fell short of Wall Street expectations, sparking a broader sell-off in software and information technology services stocks.
The decline erased nearly $55 billion from IBM’s market value. If the losses continue during regular trading, the drop would represent the company’s steepest intraday decline since the 1980s.
International Business Machines Corp. said preliminary quarterly revenue missed analysts’ estimates because of weakness in its software and infrastructure businesses.
IBM attributed the disappointing performance to customers shifting technology spending toward artificial intelligence infrastructure, including chips and servers, and away from traditional software products.
Revenue from the company’s infrastructure division declined 7% during the quarter.
IBM said it was still reviewing its financial statements and cautioned that its final results could differ slightly from the preliminary figures.
The update weighed on the broader technology sector in premarket trading. Oracle shares fell 2.3%, while ServiceNow declined 6.8%. Accenture dropped 8.5%, Adobe fell 4.8% and Cognizant lost 7%.
The sell-off also affected U.S.-listed shares of Indian technology companies. American depositary receipts of Infosys fell nearly 9% in premarket trading, while Wipro ADRs declined about 3%.
Nasdaq futures recovered some ground despite the weakness in technology stocks after the Nasdaq Composite fell 1.6% in the previous session.
IBM’s results highlighted the continuing shift in corporate technology spending toward AI infrastructure and away from conventional software and legacy IT systems, placing pressure on companies with significant exposure to traditional technology businesses. (Source: IANS)
