{"id":4717,"date":"2026-07-16T00:44:31","date_gmt":"2026-07-16T00:44:31","guid":{"rendered":"https:\/\/horizonindexadvisors.com\/index.php\/2026\/07\/16\/is-ibm-stock-a-buy-after-its-historic-25-single-day-crash-here-is-what-analysts-say\/"},"modified":"2026-07-16T00:44:31","modified_gmt":"2026-07-16T00:44:31","slug":"is-ibm-stock-a-buy-after-its-historic-25-single-day-crash-here-is-what-analysts-say","status":"publish","type":"post","link":"https:\/\/horizonindexadvisors.com\/index.php\/2026\/07\/16\/is-ibm-stock-a-buy-after-its-historic-25-single-day-crash-here-is-what-analysts-say\/","title":{"rendered":"Is IBM stock a buy after its historic 25% single-day crash? Here is what analysts say"},"content":{"rendered":"
<\/div>\n

IBM shares extended their sharp decline on Wednesday after suffering one of the biggest one-day selloffs in the company’s history, with analysts warning that changing corporate technology spending priorities could continue to weigh on the stock despite its long-term artificial intelligence ambitions.<\/p>\n

The shares fell more than 2.7% on Wednesday, adding to Tuesday’s 25% plunge <\/a>that wiped out between $67 billion and $70 billion in market value.<\/p>\n

The stock has now fallen more than 27% this year after the company released preliminary second-quarter results that missed Wall Street expectations.<\/p>\n

The technology company reported adjusted earnings of $2.93 per share on revenue of $17.2 billion, below FactSet estimates of $3.01 per share on revenue of $17.86 billion.<\/p>\n

While software revenue rose 5% during the quarter, consulting revenue was broadly flat, increasing 1% at constant currency, and infrastructure revenue declined 7%.<\/p>\n

AI hardware spending catches IBM off guard<\/h2>\n

Investors appeared to focus less on the headline earnings miss than on management’s explanation for the disappointing performance.<\/p>\n

Chief executive Arvind Krishna said customers unexpectedly redirected spending toward AI-related hardware investments during the closing weeks of the quarter.<\/p>\n

“In the last few weeks of June, we saw clients shift their quarterly capex spend toward servers, storage, and memory purchases to secure supply-constrained infrastructure ahead of expected price increases,” Krishna wrote in a letter to investors.<\/p>\n

“While we anticipated some supply chain-related impact in our expectations, we did not anticipate the magnitude of the capex reprioritization,” he said. <\/p>\n

The comments reinforced concerns that enterprises are prioritising foundational AI infrastructure over broader software and consulting projects, leaving companies such as IBM exposed to shifting IT budgets.<\/p>\n

The spending trend has also been cited by other technology companies as customers race to secure computing capacity amid surging demand for AI workloads.<\/p>\n

Analysts downgrade IBM; expect stock to remain range-bound<\/h2>\n

Following the earnings disappointment, Oppenheimer downgraded IBM to Perform from Outperform and removed its $350 price target.<\/p>\n

The brokerage noted that software revenue growth of 5% fell well short of its own 12% estimate.<\/p>\n

According to Oppenheimer, IBM attributed much of the weakness to delays in closing large mainframe-related software deals rather than outright cancellations, with stronger-than-expected growth at Red Hat and continued momentum from HashiCorp and Confluent partially offsetting the shortfall.<\/p>\n

Infrastructure revenue decline of 7% was also higher than Oppenheimer’s expectation for a 5% decline.<\/p>\n

The brokerage said consulting growth of just 1% also came in below forecasts.<\/p>\n

Oppenheimer warned that it would be “difficult for IBM to get ‘double-digit’ CC growth in software for CY26\/27 without additional large acquisitions or a material catch-up in large deals.”<\/p>\n

“The bull thesis will take longer to materialize, and we anticipate the stock will be range-bound near term,” analyst Ittai Kidron Singh wrote.<\/p>\n

The firm added that the migration of enterprise spending toward servers and storage should benefit hardware suppliers while creating near-term risks for infrastructure software companies facing tighter IT budgets.<\/p>\n

HSBC also turned more cautious, cutting its recommendation from Hold to Reduce while lowering its price target to $191.<\/p>\n

Can’t recommend IBM even after the decline: Cramer<\/h2>\n

CNBC’s Jim Cramer said<\/a> IBM has found itself on the wrong side of an important shift in enterprise technology spending.<\/p>\n

“That’s the new reality, and I have no idea when it will change, which is why I can’t recommend IBM, not even after today’s severe decline,” the “Mad Money” host said on Tuesday. <\/p>\n

Cramer argued that businesses are increasingly concentrating their technology budgets on three areas: cybersecurity, AI hardware and AI token consumption costs.<\/p>\n

“Unfortunately for IBM, they have too many products and services that fall into the ‘other types of spending’ categories, even if they also have a decent overall AI narrative,” he said.<\/p>\n

While praising Krishna for taking responsibility for the weak quarter and acknowledging IBM’s attractive dividend yield of more than 3%, Cramer said those positives were insufficient to offset broader concerns.<\/p>\n

“I’m too worried about these trends to say that IBM’s now safe to buy,” he said.<\/p>\n

“We’re at the point in the year where IT managers are putting together their budgets for 2027, and you have to assume that these three priorities I just identified will continue to dominate, which means anything outside of them has a real problem.”<\/p>\n

“I hope that IBM truly is just seeing its deals get delayed, and not canceled,” he added. “But I can’t tell you to buy a stock because I hope something is true.”<\/p>\n

Wall Street divided on IBM’s prospects<\/h2>\n

Citi analyst Fatima Boolani said the weak quarter had increased uncertainty around IBM’s growth outlook.<\/p>\n

“In what we garner is now a likely wider-dispersion for 2026\/2027 expectations, renewed and emboldened ‘AI-disruptee\/AI-loser’ concerns, we anticipate shares to be tethered,” she said.<\/p>\n

Goldman Sachs analyst James Schneider said the results reflected broader spending shifts across the industry rather than purely company-specific challenges.<\/p>\n

“We believe the mainframe shortfall reflects client demand re-prioritization toward near-term server and other hardware purchases given surging memory and component prices, a dynamic consistent with what peers such as Dell and HP have cited,” Schneider said.<\/p>\n

He added that weaker transaction processing revenue stemmed from fewer new mainframe purchases, while IBM’s Data & Automation software business also faced company-specific execution issues.<\/p>\n

\n

The post Is IBM stock a buy after its historic 25% single-day crash? Here is what analysts say<\/a> appeared first on Invezz<\/a><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

IBM shares extended their sharp decline on Wednesday after suffering one of the biggest one-day…<\/p>\n","protected":false},"author":1,"featured_media":4718,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-4717","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock"],"_links":{"self":[{"href":"https:\/\/horizonindexadvisors.com\/index.php\/wp-json\/wp\/v2\/posts\/4717","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/horizonindexadvisors.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/horizonindexadvisors.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/horizonindexadvisors.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/horizonindexadvisors.com\/index.php\/wp-json\/wp\/v2\/comments?post=4717"}],"version-history":[{"count":0,"href":"https:\/\/horizonindexadvisors.com\/index.php\/wp-json\/wp\/v2\/posts\/4717\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/horizonindexadvisors.com\/index.php\/wp-json\/wp\/v2\/media\/4718"}],"wp:attachment":[{"href":"https:\/\/horizonindexadvisors.com\/index.php\/wp-json\/wp\/v2\/media?parent=4717"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/horizonindexadvisors.com\/index.php\/wp-json\/wp\/v2\/categories?post=4717"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/horizonindexadvisors.com\/index.php\/wp-json\/wp\/v2\/tags?post=4717"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}