IBM forecasts preliminary Q2 revenue below estimates as spending shifts to AI, triggering a SaaS sell-off
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· July 14, 2026 at 11:49
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July 14 (Reuters) - IBM's preliminary second-quarter revenue forecast came below Wall Street estimate on Tuesday, as customers prioritized spending on AI infrastructure, including servers, storage and memory purchases, sending its shares slumping 17% in premarket trading.
The results reflect an industry-wide shift in technology spending toward AI infrastructure, reducing budgets for traditional software.
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According to the preliminary results, the company expects revenue of $17.2 billion during the quarter, compared with analysts' estimate of $17.86 billion, according to data compiled by LSEG.
Adjusted earnings per share is expected to be $2.93, compared with the estimate of $3.02.
IBM CEO Arvind Krishna said in a letter to investors that in this quarter the company "faltered" in adapting quickly enough to the evolving market conditions, leading to "numerous large deals" not closing as expected.
Source: [Yahoo Finance](https://finance.yahoo.com/markets/stocks/articles/ibm-expects-second-quarter-revenue-111029599.html)