Mumbai, July 14 (IANS) IBM shares plunged 23 per cent in pre-market trading on the New York Stock Exchange on Tuesday after the technology giant reported preliminary second-quarter results that fell short of market expectations, triggering a broad sell-off across software and IT services stocks.

The sharp decline erased nearly $55 billion from IBM’s market capitalisation and, if sustained through the trading session, would mark the company’s steepest intra-day fall since the 1980s.

International Business Machines Corp. said its preliminary second-quarter sales missed analysts’ expectations, citing weakness in its software and infrastructure businesses.

The company attributed the disappointing performance to customers redirecting technology budgets toward artificial intelligence (AI) infrastructure, including chips and servers, at the expense of traditional software spending.

IBM’s infrastructure business was particularly affected, with sales from the division declining 7 per cent during the quarter.

The company noted that it is still reviewing its financial statements and that the final results could differ slightly from the preliminary figures.

The weak update weighed heavily on the broader technology sector, dragging down shares of several major software companies in pre-market trading. Oracle fell 2.3 per cent, while ServiceNow declined 6.8 per cent. Accenture dropped 8.5 per cent and Adobe slipped 4.8 per cent, while Cognizant was down 7 per cent.

The sell-off also extended to Indian IT companies listed in the US. American Depository Receipts (ADRs) of Infosys were trading nearly 9 per cent lower in pre-market trading, while Wipro ADRs declined around 3 per cent.

Despite the weakness in individual technology stocks, Nasdaq futures recovered some ground after the tech-heavy Nasdaq Composite had fallen 1.6 per cent in the previous trading session.

IBM’s results underscore the ongoing shift in enterprise technology spending, as businesses continue to prioritise investments in AI infrastructure over conventional software and legacy IT systems, creating pressure on companies with significant exposure to traditional technology segments.

–IANS

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