NEW YORK (Lord Media): IBM, the American technology company, has experienced its worst stock drop in 58 years, with its market value decreasing by nearly 70 billion U.S. dollars. The decline is attributed to disappointing quarterly financial results, the race in artificial intelligence, and rising cybersecurity costs.
IBM shares fell by 25% on Tuesday, marking the company’s worst single-day stock drop in 58 years. According to Bloomberg, this historic decline reduced the company’s market value by approximately 67 to 70 billion U.S. dollars in one day.
Founded in 1911, IBM reported that its revenue for the quarter ending in June increased by only 1% to 17.2 billion U.S. dollars, falling short of investors’ expectations. CEO Arvind Krishna acknowledged in a letter to investors that the company has failed to transform itself at the desired pace.
IBM’s core infrastructure business, which includes mainframe computers, saw a 7% decline in revenue, while the software division’s revenue grew by 5%, still below market expectations.
Globally, there has been a significant increase in demand for servers, memory chips, and storage devices to build AI infrastructure, leading to higher prices and limited supply.
This situation benefited cybersecurity companies, with CrowdStrike shares rising 12%, and Okta and Netskope shares increasing by about 11%. Following IBM’s major stock drop, questions have also arisen about the future of traditional software-as-a-service companies.
However, there were some positive developments for the company. IBM’s Red Hat unit recorded an 11% increase in revenue, and the server and storage business, excluding mainframes, grew by 37%. IBM also announced a 5 billion U.S. dollars project to enhance the security of open-source software.
