'Mornings with Maria' host Maria Bartiromo analyzes the latest IBM stock predictions and the potential impact on US markets.
Shares of IBM fell more than 23% in the market open on Tuesday, raising new questions about whether companies see enough near-term returns from the use of artificial intelligence.
It's shaping up to be IBM's worst day in decades, as its second-quarter results showed profit and loss that missed analysts' forecasts.
In a letter to investors on Tuesday, CEO Arvind Krishna said IBM's Z mainframe business — its mainframe systems that boast advanced AI capabilities — is lagging behind the company's vision. The flagship product is the z17, which is described as a “workshop powerhouse.”
“With this being the strongest start to a major program in our history, we expected infrastructure revenue to decline in the low single digits for the year, beginning this quarter,” Krishna wrote. “The performance was worse than we expected, due to our lack of Z performance and the associated software stack, especially in Processing.”
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IBM CEO Arvind Krishna attends an event in the Rose Garden of the White House in Washington, DC, on July 6, 2026.
The IBM z17 is a flagship that is positioned as something that can detect fraud immediately when a customer swipes their credit card.
“Every time you swipe your credit card, check your bank balance, make a stock transaction or use an ATM, that transaction is likely happening with IBM Z. With AI embedded directly into the platform, IBM's new z17 … enables clients to detect fraud in real time without having to move their data,” according to IBM's website.
Krishna said IBM's shortfall was largely due to weakness in the software and infrastructure business as customers prioritized hardware usage to protect themselves from price increases.
The IBM Watson IoT Center is located at the Highlight Towers in Munich, Germany, on May 22, 2026.
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“In the last few weeks of June, we've seen customers shift their quarterly capex spending on servers, storage, and memory purchases to protect constrained infrastructure ahead of expected price increases,” Krishna wrote.
“These client buying patterns have had a significant impact. While we expected some supply chain-related impact on our expectations, we did not expect the magnitude of the capex reallocation,” he continued.
IBM posted adjusted earnings of $2.93 per share on revenue of $17.2 billion, missing Wall Street estimates of $3.01 per share and profit of $17.86 billion, according to CNBC.
In this image, the IBM logo can be seen displayed on a smartphone. (Mateusz Slodkowski/SOPA Images/LightRocket via Getty Images)
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Maria Bartiromo, host of FOX Business' “Mornings with Maria,” said Tuesday that IBM's slide is having a negative impact on the technology sector.
“The biggest drag on the Dow Industrials this morning is IBM. This is the worst day so far we've seen for IBM,” Bartiromo said. “This unexpected warning this morning sent a shockwave through the technology sector, causing software names to sell off; ServiceNow, Salesforce, Microsoft, all down.”
Other technology companies that are trading lower this morning include Arm Holdings, Oracle, and Apple.
