IBM Plunges, But Universal Software Decline Is A Fallacy

International Business Machines Corporation experienced a sharp 25% stock decline after missing revenue and EPS expectations, challenging assumptions about its AI-driven transformation.

The selloff reflects IBM’s underperformance in mainframes and infrastructure, with management failing to close large deals and infrastructure sales down 7%.

Despite the setback, IBM’s software segment grew 5% and Red Hat accelerated to 11%, indicating selective strength within its portfolio.

Broader software weakness is not universal; standout names like Palantir, CrowdStrike, and SAP continue to deliver robust growth, disproving a sector-wide decline.