IBM shares rebounded on Thursday, recovering roughly a quarter of the losses from Tuesday’s historic selloff, while the broader US software sector traded higher led by Accenture, Salesforce and Cognizant.
As of 1:40 p.m. EDT (11:10 p.m. IST), IBM was up 3.03% at $217.60 on the NYSE after tumbling 25% in the previous session. The stock had staged its biggest single-day decline in the company’s history after the technology giant released weaker-than-expected preliminary second-quarter results.
The recovery extended across the software space. Accenture gained 4.53% to $143.23, Salesforce climbed 3.58% to $172.98, while Cognizant Technology Solutions advanced 2.11% to $44.09, reflecting improved investor sentiment across the sector.
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IBM’s sharp selloff on Tuesday wiped out an estimated $67 billion to $70 billion in market value, according to Bloomberg. The decline marked the company’s steepest one-day stock price fall in its 115-year history, surpassing its previous worst trading session during the 1987 market crash.
The company reported preliminary second-quarter revenue of $17.2 billion, up just 1% from a year earlier, while infrastructure revenue declined 7%, missing investor expectations.
Chief Executive Officer Arvind Krishna acknowledged the disappointing performance, saying the company failed to respond quickly enough to changing customer spending patterns.
“These conditions require our teams to execute perfectly, and this quarter we faltered. 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 said.
Krishna said customer behaviour shifted sharply in the closing weeks of June as enterprise clients redirected spending away from software and mainframe purchases toward servers, storage and memory hardware in anticipation of higher costs.
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He added that while IBM had expected some disruption from supply-chain constraints, the scale of the spending shift was greater than anticipated. The company also pointed to evolving cybersecurity concerns that delayed procurement decisions and pushed back the closing of several large enterprise deals.
Thursday’s gains suggest investors are selectively returning to beaten-down technology names after one of IBM’s most severe market routs on record, although the stock remains well below levels seen before the earnings-driven selloff.
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