This week, International Business Machines Corporation (NYSE:IBM) shares took a hit following the news surrounding its preliminary second-quarter results, which fell short of expectations.
This disappointing performance was attributed to a shift in client capital spending and execution issues, marking the worst single-day loss in the company’s history with a drop of 25.21%.
Q2 Prelim Results Miss
IBM pre-announced its preliminary second-quarter results, revealing earnings of $2.93 per share, far lower than the consensus estimate of $3.02.
The company reported revenue of $17.2 billion against a Street estimate of $17.9 billion, leading to a significant drop in share price earlier this week.
Launches AI-Powered Power Systems
On Wednesday, IBM launched new AI-powered Power systems and Software aimed at helping enterprises automate IT operations, improve productivity and run AI workloads more efficiently.
The launch includes the Power S1112 server, Power Autonomous Operations and Bob Premium Package for i.
IBM said the Power S1112 will be generally available on July 24, while Power Autonomous Operations is expected to launch on Sept. 23. The company said the autonomous Software can resolve capacity constraints up to 15 times faster than manual intervention.
IBM Earnings Preview And Analyst Price Targets
The countdown is on: International Business Machines is set to report earnings on July 22, 2026 (confirmed).
- EPS Estimate: $3.02 (Up from $2.80)
- Revenue Estimate: $17.86 Billion (Up from $16.98 Billion)
- Valuation: P/E of 18.7x (Indicates fair valuation)
Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price target of $301.93. Recent analyst moves include:
- HSBC: Downgraded to Reduce (Lowers Target to $191.00) (July 14)
- Oppenheimer: Outperform (Raises Target to $350.00) (July 14)
- Morgan Stanley: Equal-Weight (Raises Target to $293.00) (July 14)
BofA Securities analyst Wamsi Mohan trimmed his price forecast on IBM to $280 from $330 while reiterating a Buy rating.
Mohan said he was “surprised by the magnitude of the topline miss” from IBM.
The firm cut 2026 IBM’s revenue to $69.6 billion from $71.4 billion and 2026 earnings to $12.02 per share from $12.47. The 2027 estimate fell to $12.48 from $13.02.
Mohan expects IBM to lower its full-year outlook, with Software now tracking mid-single-digit growth, including acquisitions rather than the double-digit trajectory management had guided toward, and Infrastructure tracking a mid-single-digit decline.
The consensus rating on IBM stands at Outperform with a consensus price target of $300.47. The range now spans $191 to $375 — a 96% gap between the most bearish and most bullish targets on a mega-cap stock.
IBM Technical Outlook: Oversold Signals And Key Levels
The stock is currently trading at $211.80, which is about 22.1% below its 20-day simple moving average (SMA) of $271.82. The Relative Strength Index (RSI) is at 29.04, indicating that the stock is in oversold territory, suggesting potential for a rebound if buying interest returns.
Top ETFs With Significant IBM Stock Exposure
- First Trust NASDAQ Technology Dividend Index Fund (NASDAQ:TDIV): 8.38% Weight
- iShares Core Dividend ETF (BATS:DIVB): 5.20% Weight
- FT Vest Technology Dividend Target Income ETF (NASDAQ:TDVI): 8.40% Weight
Significance: Because IBM carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.
IBM Price Action: Ibm shares were down 0.39% at $210.37 during premarket trading on Thursday. The stock is trading near its 52-week low of $211.03, according to Benzinga Pro data.
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