IBM struggles to put out AI fire

IBM•2026-07-14

Broader software selloff follows IBM’s warning

By contrast, the harder task of using AI software has not proven its use-case. That is compounded by pricing increasingly tied to specific outcomes rather than recurring subscriptions. IBM's warning triggered a broader selloff sending shares down in ServiceNow, Atlassian and Adobe. If IBM struggles to put out the fire, others might too.

CONTEXT NEWS

IBM Chief Executive Arvind Krishna issued a letter on July 14 warning that the shift of customer spending away from software to servers, storage, and memory purchases happened at a much faster pace than anticipated.

“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,” he wrote.

The company forecast second quarter revenue to rise 1% year-over-year to $17.2 billion, the weakest growth rate since the first quarter of 2025.

IBM struggles to put out AI fire

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