IBM's AI Story Fails to Protect Stock Price as Profit Margins Slip
IBM's stock price has taken a hit in 2026, falling by 23.0% from its starting point of $296 per share, including dividends.
The company was in the headlines for quantum breakthroughs and partnerships with OpenAI, as well as a growing book of business in GenAI, leading some to believe that IBM's fortunes were turning around.
However, the Q2 2026 results showed revenue reaching $17,162 million but net income slipping to $2,166 million and net margin edging down to 12.6%, which sits closer to a bearish scenario than an optimistic one.
The lesson here is that when a thesis relies on margin uplift, it's not enough to just watch headline growth or product announcements - one must also track net margin and earnings to see if profitability is moving in the same direction as the promised story.