IBM just slashed its 2026 revenue growth forecast to 4-5%, down from over 5%, as AI-driven spending shifts hurt its software and mainframe divisions. The company admits it “faltered” in adapting, pushing back big deals and triggering its steepest one-day stock drop in over a century. Mainframe revenue plunged 42% last quarter, dragging down infrastructure, though CEO insists clients aren’t leaving and expects a rebound later this year. Software revenue rose 5% but still missed targets, and overall Q2 results underperformed expectations. Yet, the stock edged up after-hours as investors weigh AI’s short-term disruption against IBM’s long-term resilience.
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