IBM Stock Experiences 7% Dip Despite Surpassing Earnings Expectations
IBM shares experienced a 7% dip in Thursday trading, despite reporting Q2 2025 results that surpassed both revenue and earnings expectations. The tech titan reported adjusted earnings per share of $2.80, significantly above the anticipated $2.64, and revenue of $16.98 billion, exceeding the expected $16.59 billion.
However, the disappointment stemmed from IBM’s closely monitored software segment. This sector generated $7.39 billion in revenue, marking a 10% year-over-year increase, but fell short of analyst expectations of $7.43 billion. This shortfall overshadowed the strong performance in other areas, which included:
- Infrastructure revenue: Up by 14%
- Consulting revenue: Up by 3%
CEO Arvind Krishna highlighted that the company’s “generative AI book of business” now exceeds $7.5 billion, indicating a growing client demand for AI-driven solutions. IBM increased its full-year free cash flow outlook to over $13.5 billion and maintained its projection of at least 5% revenue growth at constant currency.
“You’re seeing the stock pull back, because there’s just not a lot of room to miss,” commented Dan Morgan, senior portfolio manager at Synovus Trust, emphasizing investor sensitivity to software growth expectations.
Source: https://www.cnbc.com/2025/07/23/ibm-q2-earnings-report-2025.html