IBM shares tumbled 22% in pre-market trading on Tuesday after the company reported preliminary second-quarter results that fell short of Wall Street expectations. The technology giant posted adjusted earnings of $2.93 per share on revenue of $17.2 billion, missing analyst estimates of $3.01 per share and $17.86 billion, respectively.
CEO Arvind Krishna described the quarter as “disappointing,” citing delayed large deal closures, weaker mainframe demand, and a notable shift in client spending toward servers and storage hardware rather than software and infrastructure. The miss raised concerns about softening enterprise IT budgets, with infrastructure revenue down 7%.
In a separate blow to tech sentiment, Apple was downgraded by KeyBanc from Sector Weight to Underweight with a $250 price target. Analyst Brandon Nispel pointed to slowing device sales and reduced carrier subsidies, warning that the company’s forward valuation is hard to justify.
Chip stocks staged a partial rebound, with Tower Semiconductor surging 18% after announcing a $3 billion Japan expansion backed by government grants. AMD, Intel, and Micron also rose, recovering from the prior day’s selloff. Bank of America and Wells Fargo gained on strong earnings, though JPMorgan slipped.
The tech-led volatility rippled through risk asset markets, raising caution flags for the crypto sector. Bitcoin and altcoins have often tracked high-growth tech equities, and a downturn in enterprise spending could dampen investor appetite for digital assets. While no direct crypto impact emerged, the broader risk-off tone may pressure prices in the short term.
