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IBM is on pace for its worst day ever

(CNN) — An extraordinary warning from IBM CEO Arvind Krishna sent shares plunging – on pace for their worst day in the 115-year-old company’s history.

IBM (IBM) shares plunged 24% in premarket trading. Its worst day ever was October 19, 1987 – aka Black Monday – when shares fell 23.7%, mirroring the worst day in the overall stock market’s history.

In a preview of the company’s earnings (IBM is set to report its quarterly financial statement on July 22), Krishna said the company struggled over the past three months as customers rapidly changed their technology budgets and scrambled to get their hands on servers, storage and memory that AI datacenters are gobbling up.

That gave IBM customers less to spend on its new z17 mainframe computer, which the company was betting on to land business customers in the AI era.

“What played out was worse than our expectations,” Krishna said in a statement about the company’s second-quarter financial performance. “We did not adapt and move quickly enough.”

The price of microchips – particularly memory and storage processors – has surged in recent months as demand for those crucial datacenter components have blown through the roof. Apple raised prices of Macs and iPads, and others are expected to follow suit.

IBM saw that change coming, but was alarmed by how much its customers shifted their purchasing behavior to get chips and equipment while they still can – or while they’re still reasonably affordable.

“While we anticipated some supply chain related impact in our expectations, we did not anticipate the magnitude of the capex reprioritization,” Krishna said.

IBM also said its customers were distracted by Anthropic’s Mythos debut, which the AI company warned could give hackers tools to discover cybersecurity vulnerabilities in corporate systems before companies become aware of them. That paused several large deals that IBM had anticipated it would close by the time the quarter had ended.

“These conditions require our teams to execute perfectly, and this quarter we faltered,” Krishna said. “These are not excuses, but they are realities.”

Krishna said IBM is quickly innovating out of the turmoil, noting that the company launched its Lightwell open-source security software in rapid response to Mythos.

The company said its preliminary sales grew just 1% in the past quarter, and its unadjusted earnings per share fell 2% – both below the company’s forecasts.

Like many tech companies, IBM’s stock has gotten knocked around considerably this year. Shares are down 2% in 2026 as tech investors struggle to understand how companies will adapt to the rapidly changing landscape.

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Vance, Caine raised munitions stockpile concern, source says, as US pauses consecutive nights of strikes in Iran

(CNN) — Vice President JD Vance and Chairman of the Joint Chiefs of Staff Gen. Dan Caine both raised concerns about the US munitions stockpile to President Donald Trump as he weighed potentially escalating the war with Iran during a White House meeting on Friday, a US official told CNN.On Friday night, the US appeared to pause its bombing campaign on Iran after nearly two weeks of consecutive nights of strikes. Operations are “on a hold,” a Department of Defense source told CNN on Saturday.It’s currently unclear if the stockpile concern was the primary reason why the US paused consecutive nights of strikes or whether it will continue to do so.“President Trump has always been consistent in saying he prefers a diplomatic solution, but he continues to retain all options if Iran continues terrorist activities in the (Strait) of Hormuz or against allies,” White House Communications Director Steven Cheung said in a statement.“Combined with successful sanctions that have crippled Iran’s economy and 13 straight days of strikes against military targets in response to their repeated aggression, it would be wise for Iran to work towards a negotiated deal. Otherwise, they know what will happen.”CNN has also reached out to Vance’s office for comment.This comes as key US weapons stockpiles remain significantly depleted and could come under more pressure if strikes on Iran continue, as CNN has previously reported.Speaking to reporters after the Friday meeting with Cabinet members and top advisors, Trump stressed that the US officials were actively negotiating with Iran, though he also said it was possible the military could continue its bombing campaign or “make it a heavier dose.” He claimed Iran seemed to be getting “more serious” in ongoing talks.As of Friday afternoon, the Trump administration was still deliberating over what a potential escalation would look like, according to a source familiar. Gulf countries have urged restraint in recent conversations with administration officials but acknowledged the US has unique capabilities it could use to escalate the conflict if it chooses to do so, the source said.Even after Trump said he was considering a massive attack against Iran this week, he had privately directed his negotiators to “keep talking,” according to a source familiar with the matter, underscoring how the president has been grappling with the reality of limited escalatory military operations short of putting US troops on the ground.Few within Trump’s inner circle, or inside the Pentagon, believed the president’s options for escalating would yield the results he was looking for, according to multiple sources.CNN has also reported that before the war began, Caine and other military leaders had warned Trump that a protracted military campaign could impact US weapons stockpiles.“America’s military is the most powerful in the world and has everything it needs to execute at the time and place of the President’s choosing,” Chief Pentagon Spokesman Sean Parnell said in a statement to CNN.“We have executed multiple successful operations across combatant commands while ensuring the U.S. military possesses a deep arsenal of capabilities to protect our people and our interests.”The-CNN-Wire™ & © 2026 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
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