IBM shares plunge as AI spending boom disrupts business

July 15, 2026 - 04:15

Shares in IBM dropped 24 percent on Tuesday after the US technology company released weak preliminary results for the second quarter. The company pointed to a shift in how customers are spending their budgets, driven by expectations of higher prices for memory chips and other infrastructure tied to artificial intelligence.

A worldwide race among tech firms to build out AI systems has pushed demand for servers, memory chips, and storage to new highs. This surge has driven up prices and created supply shortages across the industry. IBM said these conditions are disrupting its traditional business, as clients delay or redirect purchases to secure AI-related hardware and components.

The preliminary results fell short of analyst forecasts, raising concerns about IBM's ability to adapt to the fast-changing market. While the company has been investing in its own AI and cloud offerings, the current boom appears to be benefiting chipmakers and server manufacturers more directly. IBM's stock decline wiped out billions in market value, marking one of its worst single-day losses in years.

Industry observers note that the AI spending wave is reshaping the entire tech landscape, with winners and losers emerging quickly. For IBM, the challenge now is to find a way to compete in a market where demand for its legacy products is being squeezed by the very infrastructure boom it helped set in motion.