Software ETF Drops 4.3% as IBM Q1 Beats Estimates, Guidance Holds
iShares Expanded Tech-Software Sector ETF fell 4.3% after IBM shares plunged 9.7% following Q1 EPS of $1.91 and revenue of $15.92 billion, both topping estimates. IBM held its fiscal-year guidance steady and saw five price-target cuts—including J.P. Morgan’s reduction to $270—triggering the ETF’s steepest software-sector slide since February.
1. IBM Q1 Earnings Beat
IBM reported adjusted first-quarter earnings of $1.91 per share on revenue of $15.92 billion, both surpassing consensus estimates and reflecting strong cloud sales.
2. Guidance Holds Steady, Price-Target Cuts
Despite the earnings beat, IBM maintained its fiscal-year revenue guidance, leading to five analyst price-target reductions, with the largest cut coming from J.P. Morgan, lowering its target to $270 from $283.
3. Impact on iShares Software ETF
In response to IBM’s muted outlook and price-target downgrades, the iShares Expanded Tech-Software Sector ETF declined by 4.3%, its steepest drop since February, driven partly by elevated options activity and volatility skew.