By Trefis Team
Publication Date: 2026-10-02 09:14:00
If you own International Business Machines (IBM) stock, you may be asking whether the business has a lasting problem. A $10,000 holding from three months ago is worth about $7,850 today. On its July 22, 2026 call, management said the second quarter of fiscal 2026 fell short of expectations. What went wrong in that quarter?
IBM Says Clients Bought Hardware First
IBM’s clients put their money into hardware and did not sign the deals IBM expected. Management said many clients redirected spending toward servers, storage and memory. Those products were in short supply, and clients wanted to buy before prices rose.
Management said tens of large deals failed to close on time, and they made up most of the shortfall. Software revenue rose 5% in the quarter, but management said organic growth was flat. Organic growth is growth without the sales added by acquisitions.
The shortage was not new for IBM. Management said limited hardware availability had already affected…
