IBM Blames AI Boom for Mainframe Sales Collapse

IBM reported a devastating quarter, missing Wall Street expectations so badly that CEO Arvind Krishna issued a rare pre-earnings warning to investors. The company's stock dropped 25% in its biggest single-day decline ever, after mainframe revenue fell 42% and full-year growth forecasts were lowered. IBM blames the AI spending boom for the shortfall, saying customers diverted budgets toward surging data center costs rather than purchasing new mainframes. Krishna insists the losses are temporary, claiming some delayed customers have already made purchases this quarter and that there is no evidence of clients abandoning mainframes altogether.