Did other software companies get affected by IBM's warning?

Yes, the selloff spread to Microsoft (down 3%), Salesforce (4%), Intuit (2.5%), and ServiceNow (3.5%).

What is the reason for IBM's weak performance according to the warning?

The weakness is due to declining demand for its cloud and consulting services, along with intense competition from Amazon and Microsoft.

IBM Profit Warning Sinks Stock 25%, Triggers Software Selloff

IBM issued a Q2 profit warning, causing its stock to plunge about 25% and triggering a sector-wide selloff in software stocks including Microsoft, Salesforce, Intuit, and ServiceNow.

July 14, 2026

2 min read

Source: The Guardian

IBM issued a profit warning for the second quarter of fiscal 2026, sending its shares down approximately 25% in a single session and sparking a broad selloff in the software sector, including giants like Microsoft (MSFT), Salesforce (CRM), Intuit (INTU), and ServiceNow (NOW).

Details of the Warning

According to media reports, IBM said its Q2 earnings would come in below expectations due to weak demand for its cloud and consulting services. The company did not provide specific figures, but the warning surprised investors who had anticipated stable performance.

Sector Impact

The selloff spread across the software sector, with Microsoft falling 3%, Salesforce dropping 4%, Intuit declining 2.5%, and ServiceNow losing 3.5%. The correlation reflects fears that IBM's weakness may signal broader challenges for the tech industry.

Context

The warning follows a weak Q1 for IBM, where revenue declined 2% year-over-year. Increasing competition in cloud computing from Amazon and Microsoft continues to pressure IBM's legacy businesses.

What This Means for Investors

Investors should closely watch IBM's official Q2 results and upcoming earnings reports from other software companies to determine whether the weakness is isolated or systemic. Caution is advised in the software sector for now.

Frequently Asked Questions

The stock fell after IBM issued a profit warning for Q2, saying earnings would miss expectations due to weak demand for cloud and consulting services.

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This article was rewritten in Wrqti's editorial style based on information from the original source above. Content is informational only — not investment advice.