IBM stock plunges over 25% after mainframe sales fall 42%
IBM's market value crashed by over 25% in a single day, the biggest drop the company has seen in 115 years.
The main reason? Mainframe sales fell by a huge 42%, dragging down related software too.
CEO Arvind Krishna explained that big companies prioritized AI infrastructure spending, delaying mainframe deals, but he indicated the missed deals were deferred, not permanently lost.
IBM launches $5B Lightwell modernization project
To bounce back, IBM announced a $5 billion AI project called Lightwell to help modernize old-school systems. Big banks like JPMorganChase and Bank of America are already on board.
Meanwhile, parts of IBM are still thriving: Red Hat grew revenue by 11%, and Power servers helped Distributed Infrastructure hit a record 37% jump last quarter.
Even so, IBM trimmed its yearly growth forecast to 4% to 5% as it works through these challenges.