IBM loses quarter of its value as tech giant's shares plunge and profits falter

IBM has lost more than a quarter of its market value in a single trading session after the technology giant reported earnings that fell far short of expectations and warned that its turnaround plan was taking longer than anticipated to produce results.

The company's shares fell 27 percent in New York, erasing approximately $35 billion in market capitalisation in what was the worst single-day decline in IBM's 115-year history. The sell-off was triggered by a quarterly report that showed revenue declining in every major business segment except artificial intelligence services, which remains too small to offset the weakness elsewhere.

Chief executive Arvind Krishna acknowledged the disappointment but argued that the results reflected the difficulty of transitioning a company of IBM's size from legacy businesses to growth markets. "We are fundamentally reshaping this company," he said. "That was never going to be a smooth process, and this quarter demonstrates that there will be setbacks along the way."

The market's reaction suggests that investors are losing patience with a turnaround that has now been underway for more than five years. IBM has divested several underperforming businesses, invested heavily in cloud computing and artificial intelligence, and made significant acquisitions, including the $6.4 billion purchase of HashiCorp. But the top-line numbers have not improved, and the company's revenue in 2025 was lower than it was a decade ago.

The results raise questions about whether IBM's model of simultaneous legacy maintenance and new business development is viable, or whether more radical restructuring — potentially including a break-up of the company — will be required. Several activist investors have been building positions in the stock and are expected to press for faster change.