Why IBM shares crashed 26%: CEO Arvind Krishna highlights customer spending shifts towards AI

IBM shares crashed over 26 percent to $213.22, marking their biggest intraday loss in 58 years, after preliminary second-quarter revenue of $17.2 billion missed analyst expectations of $17.9 billion. CEO Arvind Krishna attributed the shortfall to a sharp shift in customer capex spending toward supply-constrained infrastructure in late June, execution lapses, and weakness in the mainframe business as sales of IBM Z systems fell short of forecasts. The company also flagged that rapidly evolving cybersecurity concerns delayed client purchasing decisions, though Red Hat revenue grew 11 percent and Distributed Infrastructure posted record 37 percent growth.