IBM just had its worst day in 115 years of doing business, and the aftershocks are rippling well beyond one company’s quarterly miss.

On July 14, 2026, IBM issued a preliminary earnings warning projecting second-quarter revenue of $17.2 billion, well short of the consensus estimate sitting near $17.85 billion. The company also guided for non-GAAP earnings per share of $2.93 against an expected $3.02. Shares fell roughly 25% on the day, closing around $217.

What actually went wrong

The shortfall traces back to two parts of the business: software and infrastructure.

On the infrastructure side, the rollout of IBM’s z17 mainframe hit delays, and rising chip costs compounded the damage. Infrastructure revenue is now projected to decline in the low-single digits.

Software was supposed to be the growth engine. Instead, CEO Arvind Krishna pointed to delayed implementations of large deals and softer demand for transaction processing software.

The formal Q2 earnings release is scheduled for July 22, 2026, which means investors still have a full accounting ahead. What the preliminary warning does is set a ceiling on optimism before that report lands.

Why the whole IT sector is watching nervously

IBM’s warning didn’t stay contained to one ticker. Software and consulting stocks across the sector sold off in the aftermath.

If IBM, one of the most entrenched enterprise technology vendors on the planet, is seeing large deals slip and transaction software demand soften, that introduces a question about the broader enterprise spending environment. Investors have been paying elevated multiples across software and IT services on the premise that AI adoption would accelerate deal cycles and expand software budgets.

For crypto and digital asset markets, the read-through is indirect but worth noting. IBM’s miss is squarely a traditional-business story, not tied to its blockchain or digital asset work, according to the preliminary assessment.

What investors should watch before July 22

First, how much of the revenue shortfall is timing versus lost business. Krishna’s language around “delayed large deal implementations” suggests the former, but investors will want specifics on deal count and pipeline health.

Second, the z17 mainframe trajectory. A delayed rollout that catches up in Q3 looks very different from a rollout facing structural demand headwinds from cloud migration.

Third, whether IBM’s consulting business shows signs of enterprise budget pressure beyond IBM-specific factors. If consulting revenue is also soft, that would suggest the IT spending environment is tightening more broadly, with implications for Accenture, Cognizant, and a range of other names carrying similar exposure.