International Business Machines (NYSE:IBM) Shares Down 25.4% - Here's What Happened

Key Points

• IBM shares plunged 25.4% in heavy trading after the company warned that customers delayed major deals and shifted spending toward AI hardware, hurting confidence in its software and infrastructure businesses.
• Despite the selloff, some analysts remain constructive: Oppenheimer reaffirmed an outperform rating and raised its price target, citing IBM’s dividend profile and AI opportunity.
• IBM had recently been doing well operationally, with earnings and revenue beating estimates in its last quarterly report and the company also recently raising its dividend, which supports the long-term bull case.

International Business Machines Corporation (NYSE:IBM - Get Free Report) shares dropped 25.4% on Tuesday . The company traded as low as $213.22 and last traded at $216.5850. 66,841,085 shares were traded during trading, an increase of 768% from the average daily volume of 7,701,770 shares. The stock had previously closed at $290.23.

International Business Machines News Summary

Here are the key news stories impacting International Business Machines this week:

• Positive Sentiment: Some analysts still remain constructive on IBM’s longer-term setup, with Oppenheimer reaffirming an outperform rating and raising its price target, suggesting the selloff may not fully reflect IBM’s dividend profile and AI opportunity. Benzinga analyst note
• Positive Sentiment: The company’s latest dividend increase and AI/quantum initiatives continue to support the bull case for income-oriented and long-term investors. 247WallSt article
• Neutral Sentiment: IBM’s bad quarter appears to be benefiting cybersecurity and AI infrastructure vendors, implying the spending rotation may be more about budget reallocation than a broad collapse in enterprise tech demand. CNBC article
• Negative Sentiment: IBM’s warning that customers delayed major deals and shifted spending toward AI hardware hit confidence in its software and infrastructure businesses, prompting multiple reports of the stock’s steepest decline in decades. Reuters article
• Negative Sentiment: Several brokerages turned more cautious after the warning, including HSBC’s downgrade to Reduce, which reinforces pressure on IBM shares in the near term. HSBC downgrade

Analyst Upgrades and Downgrades

IBM has been the subject of several analyst reports. Oppenheimer reiterated an "outperform" rating and issued a $350.00 price objective (up from $320.00) on shares of International Business Machines in a research note on Tuesday. KeyCorp lowered International Business Machines to a "sector weight" rating in a report on Tuesday, June 23rd. Wedbush set a $350.00 price target on International Business Machines in a research report on Tuesday, June 2nd. Stifel Nicolaus set a $290.00 price target on International Business Machines in a report on Friday, May 22nd. Finally, Wolfe Research cut International Business Machines to a "peer perform" rating in a research report on Tuesday, June 23rd. Fifteen research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and a consensus price target of $307.17.

International Business Machines Stock Down 25.4%

The firm has a market capitalization of $203.57 billion, a P/E ratio of 19.15, a PEG ratio of 2.78 and a beta of 0.68. The company has a debt-to-equity ratio of 1.75, a quick ratio of 0.76 and a current ratio of 0.80. The stock has a 50 day moving average of $264.95 and a 200-day moving average of $265.82.

International Business Machines (NYSE:IBM - Get Free Report) last released its quarterly earnings data on Wednesday, April 22nd. The technology company reported $1.91 earnings per share for the quarter, beating analysts' consensus estimates of $1.81 by $0.10. The business had revenue of $15.92 billion during the quarter, compared to analyst estimates of $15.60 billion. International Business Machines had a net margin of 15.61% and a return on equity of 37.23%. International Business Machines's revenue was up 9.5% compared to the same quarter last year. During the same period in the previous year, the business earned $1.60 EPS. Research analysts predict that International Business Machines Corporation will post 12.45 earnings per share for the current fiscal year.

International Business Machines Increases Dividend

The company also recently disclosed a quarterly dividend, which was paid on Wednesday, June 10th. Investors of record on Friday, May 8th were paid a dividend of $1.69 per share. This is an increase from International Business Machines's previous quarterly dividend of $1.68. This represents a $6.76 annualized dividend and a yield of 3.1%. The ex-dividend date of this dividend was Friday, May 8th. International Business Machines's dividend payout ratio is presently 59.77%.

Hedge Funds Weigh In On International Business Machines

Institutional investors have recently added to or reduced their stakes in the business. Vanguard Group Inc. increased its stake in International Business Machines by 1.5% in the fourth quarter. Vanguard Group Inc. now owns 97,216,131 shares of the technology company's stock valued at $28,796,390,000 after acquiring an additional 1,439,824 shares during the last quarter. State Street Corp raised its stake in shares of International Business Machines by 1.0% during the fourth quarter. State Street Corp now owns 54,996,293 shares of the technology company's stock valued at $16,290,452,000 after acquiring an additional 518,321 shares during the last quarter. Geode Capital Management LLC lifted its holdings in International Business Machines by 1.5% in the 4th quarter. Geode Capital Management LLC now owns 22,605,083 shares of the technology company's stock worth $6,679,105,000 after buying an additional 336,069 shares during the period. Capital World Investors lifted its stake in International Business Machines by 29.2% in the fourth quarter. Capital World Investors now owns 22,021,912 shares of the technology company's stock worth $6,523,720,000 after acquiring an additional 4,976,756 shares during the period. Finally, Bank of America Corp DE lifted its position in shares of International Business Machines by 7.0% in the 1st quarter. Bank of America Corp DE now owns 16,063,653 shares of the technology company's stock worth $3,893,669,000 after purchasing an additional 1,049,602 shares during the period. 58.96% of the stock is currently owned by institutional investors.

International Business Machines Company Profile

International Business Machines Corporation (IBM) is a global technology and consulting company headquartered in Armonk, New York. Founded in 1911 as the Computing-Tabulating-Recording Company (CTR) and renamed IBM in 1924, the company has evolved from early electromechanical machines to a diversified technology provider serving enterprises and governments worldwide. IBM is publicly traded on the New York Stock Exchange under the ticker symbol IBM.

IBM's principal businesses encompass cloud computing and software, infrastructure and systems, consulting and technology services, and research and development.

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