IBM Shares Sink 25% After Weak Quarter Exposes AI Spending Shift
Updated
Updated · TheStreet · Jul 17
IBM Shares Sink 25% After Weak Quarter Exposes AI Spending Shift
3 articles · Updated · TheStreet · Jul 17
Summary
IBM shares fell about 25% after quarterly results missed badly, extending what earlier reports described as the company’s worst trading day on record.
Management blamed slower software spending, delayed large deals and weaker mainframe demand as enterprise customers redirected budgets toward AI infrastructure.
That shift is rippling across tech: memory prices have surged on hyperscaler demand, Apple has raised product prices, and Goldman Sachs cut its global PC shipment forecast.
The report argues the AI build-out is also straining its biggest backers, with Amazon, Alphabet and Oracle leaning harder on debt and equity as capital spending balloons.
At the same time, cheaper Chinese and rival U.S. AI models are eroding pricing power for OpenAI and Anthropic, raising broader doubts about the sector’s long-term moat.