IBM Shares Plummet 3.2% Amid Slowing Software Growth and Revised Revenue Outlook

International Business Machines (NYSE:IBM) shares fell by 3.2% on Friday, reaching as low as $229.38 and trading at $230.0930. This decline is a significant drop from its previous close of $237.75.

The trading volume for IBM was high, with 13,323,971 shares exchanged, representing a 73% increase from the average daily volume of 7,705,939 shares. Analysts have expressed concerns about the company's software growth slowing down in the second quarter, with recurring revenue and Red Hat data products serving as potential supports.

IBM recently received a $1 billion CHIPS Act award for its quantum wafer foundry in Albany, New York, which will be matched by the company. However, the near-term financial impact of this investment remains uncertain. Additionally, IBM's software growth slowed down in the second quarter, with transaction processing remaining a concern.

The company's revenue growth outlook has been revised downward to 4% to 5%, compared to its previous expectation above 5%. This revision is attributed to weaker mainframe trends and lower infrastructure revenue, which fell by 7%.