International Business Machines Tumbles as AI Doubts Grow

International Business Machines ( (IBM) ) has fallen by -11.93%. Read on to learn why.

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International Business Machines shares fell 11.93% over the past week as investors reassessed the company’s role in the fast-moving artificial intelligence race and its broader ecosystem risks. High-profile short seller Jim Chanos argued that IBM is now more of a marketing and consulting outfit than a true technology innovator, claiming the group is more exposed to AI-related disruption than positioned to benefit from it. He highlighted IBM’s India-centric services model, reliance on software acquisitions and what he called a focus on “financial engineering” rather than breakthroughs like its earlier Watson-era AI work.

The negative sentiment has been amplified by turbulence at Kyndryl, IBM’s infrastructure-services spin‑off, which disclosed a review of its accounting practices and the departure of key financial and legal executives. While Kyndryl is now a separate company, the headlines have revived questions about the quality and stability of IBM’s extended ecosystem and legacy services business, encouraging traders to de-risk after the recent run‑up in the stock. This reaction has overshadowed IBM’s latest earnings, where the company actually delivered a solid 12% revenue increase and beat Wall Street expectations.

Despite the pullback and vocal skepticism from bears like Chanos, Wall Street analysts remain broadly constructive on International Business Machines. The stock carries a Moderate Buy consensus, with 13 Buys, four Holds and one Sell, and an average price target around $336.65 per share, implying meaningful upside from recent levels. Jefferies’ Brent Thill reiterated a Buy rating with a $370 target, suggesting that many professionals still see IBM as a viable AI and software turnaround story, even as the market digests concerns about its innovation pipeline and acquisition-fueled growth model.