IBM stock dropped 25% in a single day because customers bought hardware instead of software. The CEO wants you to know this was unpredictable. Apparently no one at IBM considered that clients working with finite budgets might make choices.
The company issued an earnings warning for Q2. Traders who bought IBM at the top lost a quarter of their money before lunch. They're now learning that "Big Blue" refers to the color of their portfolio.
This marks IBM's worst day on record. Not worst day this year. Not worst day in a decade. Worst day ever. The company has been publicly traded since 1915. It survived the Great Depression, two world wars, the dot-com crash, and the 2008 financial crisis with better days than this. But clients shifting spend from software to hardware? That's the asteroid.
The CEO blamed weakness in software and infrastructure. He did not explain why IBM sells both products if buying one prevents buying the other. He did not address why this came as a surprise. He definitely did not mention that maybe someone in forecasting should have noticed clients doing this before earnings day.
Retail traders saw a legacy tech company and assumed stability. They got volatility that would make a crypto bro nervous. Now they're holding shares down 25% and wondering if their Robinhood app is broken. It's not broken. IBM just decided to have its worst trading day in 111 years of existence.
Technical analysis called this, by the way. The charts showed a massive sell signal when the CEO opened his mouth.
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