National shareholder rights firm Hagens Berman is investigating potential securities law violations by International Business Machines Corporation after its CEO previewed disastrous second-quarter 2026 results on July 14, 2026. The news sent IBM shares down 25%, erasing over $68 billion of market capitalization in one day. The investigation focuses on IBM's statements about its Z family of enterprise mainframes, particularly the z17 flagship, after the company reported a strong start to 2026 with Infrastructure revenue up 15% and Z revenue up 51% in the first quarter. On the April 22 earnings call, management had projected constant currency revenue growth of 5-plus percent for the full year and similar growth for the second quarter, but on July 14 the company announced total revenue growth of just 1% and an Infrastructure revenue decline of 7%, driven by a shortfall in Z performance and associated software. CEO Arvind Krishna attributed the miss to customer capex reprioritization and the failure of numerous large deals to close, and the firm is examining whether IBM had earlier information about the likelihood of those deals not closing.
International Business MachinesZ mainframe shortfall due to customer capex reprioritization and large deals not closing, causing revenue miss and 25% stock drop.