3Mês·

Bought...

$IBM (+0,76%) Today, I'm buying 1/3 of this stock. Why? I see this as a good entry point for the medium term.

2 Comentários

3Mês

The IBM disaster of July 14, 2026, is a textbook example of the current market shift in the AI era. The fact that the stock temporarily plummeted by more than 25% has fundamental reasons that go far beyond a simple revenue shortfall.

1. The Cause:
“Cannibalization” by Hardware The main reason for the plunge is a massive reallocation of customer budgets.

The AI boom is eating into software:
In the final weeks of June, companies massively shifted their budgets toward hardware (servers, storage, RAM) to protect themselves from impending price increases for memory chips. Impact: This came at the expense of IBM’s high-margin software business. What is a boon for chip and hardware manufacturers has become a “cannibalization effect” for IBM.

2. The Numbers (Preliminary) IBM has released preliminary figures for the second quarter of 2026 that fell far short of expectations:
Revenue: $17.2 billion (expected: $17.86 billion).
EPS (non-GAAP): $2.93 (expected: $3.02).
Infrastructure division: 7% decline.

3. Why IBM Is Now Seen as a Warning Sign for the Entire Sector

The market is reacting so harshly because IBM’s statements are viewed as an indicator of an industry-wide slowdown:

Fears of AI Displacement: Investors have long feared that AI tools (such as Anthropic systems for mainframes) could erode the traditional software business of companies like IBM in the long term.Slow Pace of Adaptation: CEO Arvind Krishna openly admitted that IBM had not adapted quickly enough to changing conditions and was unable to secure major contracts as planned.

Industry Reaction:

The slump has swept through the entire software sector; stocks such as ServiceNow, Workday, and Microsoft also fell sharply, as investors now fear that budgets for hardware investments will be cut at other software providers as well.

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Poor Dad@PoorDad

3Mês

It's getting more and more fragile up there

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