IBM dragged down by DOGE contract cancellation roulette

IBM beat Wall Street's expectations for both revenue and income in the first quarter of 2025, but its stock price still dropped more than six percent in after-hours trading.

Some share of the blame for the dip may belong to DOGE, the US government data-scouring, cost-trimming operation unofficially overseen by Tesla and SpaceX oligarch Elon Musk.

IBM CFO Jim Kavanaugh told the media DOGE recommendations to the White House caused 15 of its contracts with government agencies to be cancelled, paused, or suspended, amounting to about $100 million in future payments.

IBM's consulting business is more susceptible to discretionary pullbacks and DOGE-related initiatives

During Big Blue’s quarterly earnings conference call with Wall Street, he revised those remarks, referring to "a handful of contracts" and cited a financial impact of less than $100 million.

Also on the call, CEO Arvind Krishna acknowledged "a couple of contracts" were impacted ...