BUZZ-Software stocks tumble after IBM's prelim estimates reignite AI disruption fears
IBM•Software stocks slide after IBM's preliminary Q2 estimates
Software stocks slid in premarket trading after International Business Machines' dour preliminary second-quarter estimates reignited worries that AI could disrupt the sector.
IBM tanked 22.9%, putting the stock on track for its biggest daily drop since 1987.
"In the last few weeks of June, we saw clients shift their quarterly capex spend toward servers, storage, and memory purchases to secure supply-constrained infrastructure ahead of expected price increases," IBM CEO Arvind Krishna said in a letter to investors.
Shares of Workday were down 9.8%, ServiceNow down 8.3%, Atlassian down 8.5%, and Intuit down about 6.1%.
Microsoft dropped 3%, Salesforce fell 6.4%, Zscaler was off 4.1%, and Oracle was down 2.3%.
U.S.-listed shares of Indian IT companies Infosys and Wipro were down 9% and 4%, respectively.
Shares of European software companies such as SAP, Sage, and Dassault Systemes also tumbled, while Canada-based Thomson Reuters' U.S.-listed shares were down 1.6%.
The S&P 500 Software & Services Index is down over 17% year to date on worries newer AI models will disrupt the business models of software companies.
