IBM shares plunge 25% as customers pivot to AI infrastructure
The technology giant’s stock dropped sharply as clients redirected capital to artificial intelligence servers and storage, even as broader US markets rose on diplomatic news.
IBM shares fell 25% as customers shifted spending to artificial intelligence, according to a report from the Financial Times. The decline highlights a significant reallocation of corporate capital away from traditional IT expenditures and towards emerging technologies.
Chief executive Arvind Krishna stated the company ‘faltered’ while clients raced to purchase servers and storage. The admission points to a strategic misalignment between IBM’s offerings and the immediate infrastructure demands of its customer base, which is prioritising AI-related hardware.
The company’s performance stood in contrast to the broader US stock market on the same day. US markets saw gains, with the Dow Jones Industrial Average rising 0.8%, the S&P 500 up 0.3%, and the Nasdaq Composite climbing 0.2%.
These market movements coincided with the commencement of a two-day summit in Beijing between US President Donald Trump and Chinese President Xi Jinping. The event marks the first visit by an American president to China since 2017.
The summit agenda includes discussions on trade, artificial intelligence, and the Strait of Hormuz. Key US CEOs attending the summit include Elon Musk, Tim Cook, and Jensen Huang. Nvidia shares surged more than 2% following news that the US approved H200 chip sales to Chinese firms.
