IBM is betting on a mainframe computing rebound to drive its 2026 recovery after a shock second-quarter warning sent its stock reeling. CFO Jim Kavanaugh told Yahoo Finance that key indicators point to a record year for mainframe, driven by capacity growth and AI inferencing value, and that the company sees no evidence of clients moving away from the platform. IBM reported second-quarter net sales of $17.2 billion, up 1% year-over-year and in line with estimates, and diluted earnings per share of $2.93, up 5% and also matching expectations. The company guided for full-year 2026 constant currency revenue growth of 4% to 5%, a modest markdown from its prior forecast of more than 5%. Since the July 14 preannouncement that fell well below consensus, Wall Street has significantly cut its earnings per share estimates for IBM for 2026 and 2027, and Stifel analyst David Grossman said the stock remains range-bound with a slight downward bias given low near-term visibility.
International Business MachinesIBM issued a shock second-quarter warning and cut its 2026 revenue growth forecast, leading to lowered EPS estimates and a stock decline.
Stifel Financial Corporation