IBM Stock Is Having the Worst Day in Its History
2026-07-14 18:17
•Patrick Sanders •The Motley Fool
•• ••••• Axe Capital view
IBM's Historic Plunge Casts Shadows on SA Tech Exposure
IBM's steep earnings warning highlights shifting tech investments—worth watching for JSE investors linked to tech infrastructure themes.
IBM’s 25% drop in a single day is a stark reminder that even industry giants can misread changing market dynamics. They’re losing ground as clients pivot to storage and memory infrastructure—areas where IBM hasn’t been nimble enough. For South African investors, the direct links are thin since IBM isn’t on the JSE. But this shift favors companies involved in memory chips and cloud infrastructure, themes that have implications for global tech-linked counters like Naspers and Prosus, which are exposed to digital infrastructure investments abroad. The rand’s weakness against the dollar (USD/ZAR) could amplify risks here, as foreign tech earnings translate poorly locally if the dollar strengthens. Microsoft and Salesforce showed resilience, suggesting diversification and cloud focus remain critical. Time to be selective: some tech exposure is still valuable but watch for shifts to hardware-like memory plays. If IBM rebounds with better execution, or clients shift strategies again, the current caution could be premature. this is just my opinion and not financial advice
Trim broad tech exposure via Naspers and Prosus, then watch USD/ZAR closely. Increase holdings in stocks benefiting from cloud and memory infrastructure growth, but avoid pure hardware classical plays like IBM for now.
- Naspers
- Prosus
- USD/ZAR
- IBM recovers with new strategy
- Rand strengthens unexpectedly, boosting local currency tech earnings
6/10
IBM shares plummeted as much as 25% after the company issued a warning about Q2 earnings, citing lower-than-expected revenue due to clients shifting spending away from IBM products toward storage and memory infrastructure ahead of anticipated price increases. The stock drop represents the worst single day in IBM's 115-year history, surpassing the 1987 Black Monday decline. CEO Arvind Krishna acknowledged the company failed to adapt quickly enough and numerous large deals missed expected timelines.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Patrick Sanders
Categories: Equities, Earnings
Tickers: IBM, MU, SNDK, MSFT, CRM
Sentiment: Mixed - Stock fell 25% on preliminary Q2 earnings warning showing revenue shortfall, infrastructure revenue down 7%, and management acknowledgment of execution failures. Stock is now down 26% year-to-date and experiencing its worst single day in company history. Data center revenue increased 102% sequentially and 653% year-over-year to $11.52 billion, benefiting from strong demand for memory products as customers shift capital expenditures to storage and memory infrastructure.
Keywords: IBM earnings warning, stock decline, capex reprioritization, storage and memory demand, mainframe rollout, data center spending
Insights:
- IBM: Negative: Stock fell 25% on preliminary Q2 earnings warning showing revenue shortfall, infrastructure revenue down 7%, and management acknowledgment of execution failures. Stock is now down 26% year-to-date and experiencing its worst single day in company history.
- MU: Positive: Data center revenue increased 102% sequentially and 653% year-over-year to $11.52 billion, benefiting from strong demand for memory products as customers shift capital expenditures to storage and memory infrastructure.
- SNDK: Positive: Data center revenue jumped 233% sequentially to $1.5 billion, reflecting strong demand for flash memory chips in data centers as the computing industry prioritizes storage and memory products.