IBM just delivered a number nobody wanted to see. The company’s preliminary second-quarter revenue landed at $17.2 billion, falling short of the roughly $17.86 billion Wall Street had penciled in. The stock dropped on the news, because that’s what stocks do when you miss by more than $600 million.
The gap between expectation and reality here isn’t trivial. A miss of that magnitude, roughly 3.7% below consensus, suggests something more than a rounding error in the forecast models.
What happened to the momentum
IBM’s Q1 2026 results, reported back on April 22, painted a much rosier picture. Revenue came in at $15.9 billion, representing a 9% year-over-year increase and beating analyst expectations. That was supposed to be the setup for a strong second quarter.
Even then, though, there were warning signs. Despite the Q1 beat, IBM’s stock actually declined after the report because management issued cautious forward guidance.
