IBM stock plummets 25%: worst trading day in more than 55 years

IBM experienced a historically bad trading day. The stock closed more than 25% lower, representing the largest daily share price decline since 1968. Over five trading days, the price fell by as much as $83.70, from above $300 to $217.07. According to the company itself, the cause lies in a shift in customer spending towards AI infrastructure.

Customers overwhelmingly choose AI over traditional software

IBM indicates that customers are pulling their budgets away from traditional software and mainframes. Instead, companies are increasingly investing in AI servers and memory infrastructure. This shift hits IBM hard because precisely these segments have long been core to the company.

The market reaction is accordingly severe. On the five-day chart, it is clearly visible how the stock went into freefall on 14 July. The market capitalisation fell to $204.02 billion. The 52-week high was still $332.46, indicating how hard the blow is for investors.

What does this mean for the tech sector?

The fall of IBM is a signal that the AI revolution is not only creating new winners, but also putting existing tech giants under pressure. Companies that have long profited from enterprise software and mainframe contracts are seeing their revenues erode as customers prioritise modern AI hardware and infrastructure.

In pre-market trading on 15 July, the stock showed a slight recovery of 0.94%, coming in at $219.10. Whether this heralds a sustainable recovery or is merely a short-lived rebound remains to be seen. The question many analysts are now asking is how IBM will reposition itself in a market that is shifting rapidly towards AI.