International Business Machines Corp. (IBM) shares plunged about 8% after the company’s software revenue and forward guidance failed to meet investor expectations, triggering a wider sell-off in the sector.
Wedbush maintained its Outperform rating on the stock but lowered its price target to $320, noting the company's "prudent" guidance faced headwinds from investors who had anticipated upward pressure.
The Armonk, New York-based technology giant reported after the bell Wednesday, with results showing particular weakness in its software division. The disappointment sent ripples through the market, with the iShares Expanded Tech-Software Sector ETF (IGV) falling 3.9% at the opening bell Thursday. The results from IBM, a bellwether for enterprise tech spending, cast a shadow over other software names like ServiceNow (NOW), which also reported earnings.
The decline marks a significant reversal for the stock, which had been a strong performer. The focus now shifts to whether the software segment's weakness is a temporary setback or a sign of a broader slowdown in enterprise IT spending.
The stock's sharp drop puts it on track for one of its worst single-day performances in recent months. Investors will be closely watching for management commentary on the software business and whether the company can reassure the market about its growth trajectory in the coming quarters.
This article is for informational purposes only and does not constitute investment advice.
