What is IBM's preliminary Q2 2025 revenue forecast?

IBM forecasted preliminary Q2 2025 revenue of $17.2 billion.

What was the analyst estimate for IBM's Q2 revenue?

The analyst estimate was $17.86 billion, according to LSEG data.

Why did IBM's stock drop 17%?

The stock dropped because the preliminary revenue missed estimates, driven by a shift in spending toward AI infrastructure.

What caused IBM's Q2 revenue weakness?

Customers prioritized AI infrastructure spending over traditional software, reducing budgets for the latter.

Did IBM provide guidance for the next quarter?

IBM did not provide formal guidance but indicated the AI spending trend may continue.

IBM Preliminary Q2 Revenue Misses Estimates as AI Spending Shifts

IBM's preliminary Q2 2025 revenue forecast of $17.2 billion missed Wall Street estimates of $17.86 billion, as customers shifted spending to AI infrastructure. Shares slumped 17% in premarket trading.

IBM (NYSE: IBM) announced preliminary second-quarter 2025 revenue of $17.2 billion, falling short of the $17.86 billion consensus estimate compiled by LSEG. The shortfall reflects a broad industry shift in technology spending toward AI infrastructure, including servers, storage, and memory, at the expense of traditional software. Shares of IBM dropped 17% in premarket trading following the announcement.

Key Financial Results

Metric	Value
Preliminary Revenue (Forecast)	$17.2 billion
Analyst Estimate (LSEG)	$17.86 billion
Difference	-$0.66 billion (-3.7%)

Highlights from the Statement

IBM attributed the revenue miss to customers prioritizing AI infrastructure investments, which reduced budgets for traditional software. The company noted that this trend is industry-wide and may persist.

Future Guidance

IBM did not provide formal guidance for the next quarter but indicated that the shift toward AI spending could continue to impact traditional software revenue.

Impact on Stock

IBM shares fell 17% in premarket trading on Tuesday, reflecting investor concern over the slowdown in traditional software sales amid the AI spending surge.

What This Means for Investors

The preliminary results suggest that IBM's legacy software business may face near-term headwinds as customers reallocate budgets to AI infrastructure. However, the company could benefit from increased demand for AI-related hardware and services in the long run.