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Or sign-in if you have an account.IBM reported preliminary second-quarter revenue of US$17.2 billion, short of the US$17.9 billion Wall Street had been anticipating. Photo by Budrul Chukrut/SOPA Images/LightRocket via Getty ImagesShares of software and IT services companies plunged Tuesday after International Business Machines Corp. reported preliminary results that missed analyst expectations, reigniting questions about the sector.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorIBM shares plummeted as much as 26 per cent on the results, nearing their biggest one-day drop since at least 1968. The company reported that it missed expectations because customers shifted capital spending from IBM’s products to chips and servers.Software peers were dragged lower as Microsoft Corp. fell two per cent, Workday Inc. dropped 6.3 per cent, Salesforce Inc. shed 3.2 per cent, and Autodesk Inc. slid 2.4 per cent. U.S.-listed shares of SAP SE fell 3.4 per cent. The iShares Expanded Tech-Software Sector ETF, a proxy for the software sector, slumped as much as 2.7 per cent before paring that decline.Canada's best source for investing news, analysis and insight.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Investor will soon be in your inbox.We encountered an issue signing you up. Please try againShares of IT services companies also tumbled with Accenture PLC dropping 2.9 per cent, Cognizant Technology Solutions Corp. declining 2.2 per cent, and Infosys Ltd. falling 2.8 per cent.IBM’s results “will deliver a devastating blow to software/services stocks as investors will worry about the capex pivot negatively impacting the whole industry,” wrote Adam Crisafulli, founder of Vital Knowledge.The company reported preliminary second-quarter revenue of US$17.2 billion, short of the US$17.9 billion Wall Street had been anticipating. Chief executive Arvind Krishna said IBM customers were holding back spending as they instead shifted their capital to components used in artificial intelligence infrastructure, including servers, storage, and memory. IBM offices in Foster City, California.“We did not adapt and move quickly enough, and numerous large deals failed to close on the timelines we expected, driving the majority of our shortfall,” Krishna wrote in a letter to investors. “These are not excuses, but they are realities.”Both software and IT service stocks have been pressured throughout this year, as investors fret that the proliferation of AI will reduce demand for their services. The iShares software ETF is down more than 12 per cent in 2026, compared with a gain of more than 78 per cent for the Philadelphia Semiconductor index. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.