International Business Machines (IBM) experienced a significant decline in its stock price, plummeting 25% on Tuesday, marking its worst day ever.
This drop followed the company's announcement of preliminary Q2 results that fell short of expectations, with adjusted earnings of $2.93 per share and revenue of $17.2 billion, both below FactSet consensus estimates of $3.01 earnings per share and $17.86 billion in revenue.
Oppenheimer analyst Param Singh noted that the company's failure to meet these benchmarks could hinder its ability to achieve full-year financial goals, potentially leading to further declines in share price.
While there were some positive aspects in areas like RedHat and server/storage, Singh expressed skepticism about IBM's ability to achieve double-digit growth in its cloud software segment for the upcoming years. This downgrade contrasts with the broader consensus on Wall Street, where most analysts maintain a buy or strong buy rating on IBM, despite the stock's nearly 27% decline year to date