IBM suffers worst single-day drop since 1987 amid collapsing profits
Shares of IBM plummeted over 25% on Tuesday following a disappointing preliminary Q2 earnings report, marking a worse single-day decline than during the 1987 "Black Monday" crash. The company reported $17.2 billion in revenue, missing analysts' forecasts of $17.86 billion, and issued a severe profit warning. IBM CEO Arvind Krishna blamed a sudden late-June shift in corporate capital expenditure away from high-margin mainframe computers and software, redirecting funds instead toward securing supply-constrained datacenter infrastructure (servers, memory, storage) and cybersecurity before expected price hikes. This spending reallocation triggered a broader selloff across major software stocks, including Microsoft, Salesforce, and ServiceNow, as investors worry about how deeply the AI infrastructure boom is draining traditional enterprise software budgets.