After shocking quarter, IBM insists that AI isn't killing the mainframe

IBM reported significantly worse-than-expected earnings, leading to a 25% stock price drop after the CEO warned investors beforehand. The primary cause cited for the miss was a 42% decline in revenue from its mainframe business, attributed to customers redirecting budget due to rising data center gear costs driven by the AI boom. Despite the downturn, IBM executives maintain this is a temporary issue and that customers will eventually purchase the delayed mainframes and associated software.

• IBM reported earnings that fell significantly short of Wall Street expectations.
• The company’s stock experienced its largest single-day decline ever after a pre-warning from the CEO.
• Revenue from IBM’s mainframe business dropped by 42%, impacting overall results.
• The decline is attributed to customers facing high cost increases for data center gear and PCs due to the AI build-out boom.
• IBM’s CEO Arvind Krishna and CFO Jim Kavanaugh insist this is a temporary disruption.
• IBM lowered its full-year growth forecasts.
• The company emphasizes that customers are not moving away from the mainframe platform.
  Continue reading https://techcrunch.com/2026/07/22/after-shocking-quarter-ibm-insists-that-ai-isnt-killing-the-mainframe/