IBM Stock Takes Hit as Investors Weigh Mainframe Slowdown Against AI Deals

IBM's stock price took a hit on Wednesday, dropping by more than 3% to $240.31 in midday trading. This decline comes as investors weigh the company's mainframe slowdown against its recent AI deals.

The company's shares have been sliding since Tuesday, when they closed at $248.37. The stock's price has already cut about 19% from its 52-week high of around $332.

Despite this downturn, IBM's chairman and CEO Arvind Krishna remains confident in the company's strategy and portfolio. In a recent release, he stated, 'We fundamentally believe that we are in the early innings of a structural shift for business, and that our portfolio, across software, infrastructure, and consulting, is well-positioned to help our clients tap the value, and manage the challenges, of an AI-driven future.'

However, investors seem skeptical about IBM's ability to execute on this strategy. The company cut its full-year constant-currency revenue growth guidance from more than 5% to 4-5%. This move has led some analysts to question whether IBM is struggling with execution issues.