IBM Stock Slumps Amid Software Slowdown
IBM's stock has taken a hit in recent times, plummeting about 22% year-to-date as of this writing. The company's shares are currently trading near $230, roughly 30% below its record close of $329.23 set on June 2.
The decline was largely due to the company's preliminary second-quarter results, which fell short of expectations. IBM's software revenue growth slowed significantly in the second quarter, with a 5% increase compared to the first quarter's 11%. Additionally, consulting revenue remained flat, while infrastructure revenue fell 7%, with the mainframe business down 42% as the z17 launch cycle wound down.
CEO Arvind Krishna attributed the slowdown to clients shifting spending towards servers, storage, and memory ahead of expected price increases, as well as large deals not closing on time. However, he acknowledged that IBM's teams 'falter[ed]' in executing these plans.