IBM's mainframe sales get mugged by AI hardware panic, stock sheds more than a quarter of its value
CEO Krishna: Customers blew their Z budgets on servers and storage before prices spike, Q2 financials 'disappointing'
IBM says customers spooked by soaring demand for AI infrastructure raided their mainframe budgets to stockpile servers, storage, and memory instead, knocking Big Blue's flagship Z business off course.
Ahead of its full calendar Q2 earnings release next week, IBM took the unusual step of publishing preliminary quarterly results alongside a letter from CEO Arvind Krishna explaining why the numbers fell short of expectations.
The biggest disappointment came in Infrastructure, where revenue fell 7 percent, despite what IBM had previously described as the strongest launch of a mainframe generation in its history.
The disclosure led to a more-than 25 percent plunge in Big Blue's share price on Tuesday.
The Q2 culprit wasn't a sudden loss of affection for mainframes, according to Krishna, but a last-minute scramble to secure hardware increasingly caught up in...
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