IBM Cuts 2026 Sales Outlook to 4%-5% as Mainframe Demand Slumps 42%
Updated
Updated · Bloomberg · Jul 22
IBM Cuts 2026 Sales Outlook to 4%-5% as Mainframe Demand Slumps 42%
3 articles · Updated · Bloomberg · Jul 22
Summary
IBM now expects 2026 revenue growth of 4% to 5%, down from its prior forecast of more than 5%, after weaker demand in its mainframe business.
Software—the company’s closely watched segment—is also set for slower expansion, with CFO Jim Kavanaugh guiding to 6% to 8% annual sales growth.
The downgrade follows a weak second quarter in which infrastructure revenue fell 7% and Z mainframe revenue dropped 42%, helping push IBM below earnings expectations.
IBM has said customers delayed mainframe purchases as AI-driven spending on other data-center equipment and PCs tightened budgets, a setback that also triggered a sharp stock selloff.