IBM shares drop 20% after earnings warning, $70B market loss

Shares of International Business Machines Corp. plunged more than 20 percent on Tuesday, July 14, 2026, in one of the steepest single-day declines in the company's history after it issued a preliminary earnings warning, citing a dramatic and unexpected shift in corporate spending toward artificial intelligence hardware. The selloff erased approximately $70 billion in market value and triggered a broader downturn across the software sector.

The technology giant disclosed preliminary second-quarter revenue of $17.2 billion, a 1 percent year-over-year increase that fell significantly short of analyst expectations of roughly $17.9 billion. Adjusted earnings per share are projected at $2.93, below estimates of approximately $3.02. In a letter to investors, Chief Executive Arvind Krishna stated the company "stumbled" and "did not adapt or move quickly enough" as clients rapidly reallocated budgets in the final weeks of June.

Krishna attributed the shortfall to a massive, last-minute reprioritization of client capital expenditures. Corporations accelerated purchases of servers, storage, and memory to secure supply-constrained hardware ahead of anticipated price increases, diverting...