IBM Stock Declines Amid Earnings Miss and Quantum Investment

IBM's stock price has declined by 19.7 percent year to date after the company reported modest growth but missed earnings per share (EPS) estimates in its second quarter results. The decline was driven by a 42 percent drop in mainframe revenue, which management described as a late-cycle trough.

The company's Software segment delivered 5.1 percent revenue growth, with its Red Hat unit up 11 percent, highlighting continued momentum in hybrid cloud and open source platforms. However, the Infrastructure segment revenue declined 7.4 percent year over year.

Despite the Q2 miss, IBM secured a $1 billion quantum manufacturing award on September 16, 2026, under the U.S. CHIPS and Science Act with the Department of Commerce to build a pure-play quantum wafer foundry in Albany, New York. The company has also made an additional investment commitment of $1 billion.

Earnings estimates for 2026 have increased 0.7 percent to $12.33 over the past 60 days, while estimates for 2027 have slipped 0.6 percent to $13.22, suggesting modest confidence in IBM's ability to stabilize growth.