International Business Machines ( (IBM) ) has fallen by -8.78%. Read on to learn why.
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International Business Machines (IBM) experienced a notable decline in its stock price, dropping by 8.78% over the past week. This downturn came despite a strong second-quarter earnings report that exceeded Wall Street expectations for both revenue and profit. The decline was primarily driven by weaker-than-expected sales in IBM’s core software segment, which fell short of analyst estimates. Investors were particularly disappointed by the flat transaction processing sales, as many customers redirected their spending towards IBM’s latest AI-enhanced mainframes.
Despite the recent stock slump, IBM’s infrastructure segment showed robust performance, with revenue surpassing estimates. The company’s consulting division also witnessed a modest improvement, ending a streak of five consecutive quarters of decline. IBM’s strategic focus on AI and hybrid cloud growth remains a key driver for its long-term prospects. The company’s “AI book of business” has grown to $7.5 billion, highlighting the increasing demand for AI solutions and consulting services.
Analysts maintain a moderate buy consensus on IBM stock, with expectations of potential upside in the coming months. The company’s strategic pivot towards AI and hybrid cloud, coupled with its strong infrastructure segment, positions IBM well for future growth. While the market’s initial reaction to the earnings report was negative, IBM’s long-term strategy and focus on high-margin software and services could drive sustained growth and profitability.