# IBM Stock Plummets 25% on Earnings Miss and Spending Shift to Hardware

> IBM just had its worst trading day since 1987, with shares falling about 25% after the company warned that second-quarter results came in below expectations. It reported $2.93 in earnings per share on $17.2 billion in revenue, short of the roughly $3.01 and $17.86 billion Wall Street wanted. The single-day drop was steeper than IBM's fall on Black Monday in 1987. The reason is a telling one. IBM said clients are reprioritizing budgets toward servers, storage, and memory chips, racing to secure AI hardware before shortages bite, which pulled spending away from IBM's other lines. Oddly, its own distributed infrastructure business had its best quarter ever, growing 37%, so the story is less about IBM being shut out of AI than about the whiplash the buildout is causing across enterprise IT budgets. When a company this large swings this hard in a single day, it is a signal of how violently AI spending is reshaping where corporate money flows.

_Section: [Daily AI Updates](https://www.wortins.com/daily-ai) · Source: CNBC · Published Sunday, July 19, 2026_

## Wortins' read

IBM just had its worst trading day since 1987, with shares falling about 25% after the company warned that second-quarter results came in below expectations. It reported $2.93 in earnings per share on $17.2 billion in revenue, short of the roughly $3.01 and $17.86 billion Wall Street wanted. The single-day drop was steeper than IBM's fall on Black Monday in 1987. The reason is a telling one. IBM said clients are reprioritizing budgets toward servers, storage, and memory chips, racing to secure AI hardware before shortages bite, which pulled spending away from IBM's other lines. Oddly, its own distributed infrastructure business had its best quarter ever, growing 37%, so the story is less about IBM being shut out of AI than about the whiplash the buildout is causing across enterprise IT budgets. When a company this large swings this hard in a single day, it is a signal of how violently AI spending is reshaping where corporate money flows.

## Source

[Read the full story at CNBC](https://www.cnbc.com/2026/07/14/ibm-warns-second-quarter-earnings-fell-short-of-expectations.html)

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