IBM Stock Still Extremely Low ahead of Today’s Q2 Earnings Report

Quick overview

IBM (IBM) stunned the stock market when it jumped out front of its Q2 earnings release to share revenue numbers, plunging its stock value by more than 25%.

On July 14^th, IBM lost a quarter of its stock value when it announced its revenue early- $17.2 billion, which was below previous estimates. The company CEO Arvind Krishna said that IBM faltered for the quarter, but he also pointed to an alarming trend of heavy capex spending that is shared by many other tech companies.

The company will report its earnings on Wednesday, after the closing bell, and we will have to wait and see if getting out front of the bad news was the right move. The stock is considered extremely volatile right now but has been low for the past week.

IBM’s Challenges Coming into Q2 Earnings

IBM laid their cards on the table, and investors know now what to expect. Revenue is already calculated to be less than forecast, and earnings per share could come in under Wall Street estimates as well. The biggest shadow looming over IBM’s revenue moving forward could be the status of a number of large deals. In the statement they issued last week, the company said one of the problems that held back their revenue for the quarter was that several deals were not going through as planned. Investors may be hesitant to give IBM stock a shot if they believe that future deals are in jeopardy.

Shares of IBM stock were trading at $211 on Wednesday morning at the time of writing, with a slight gain of 0.2% from the previous day. A month ago, the stock was trading at $262; now, investors are skittish about jumping onboard with this stock right before the earnings report. IBM painted a picture of their financial situation, and the market is believing them.

One of the key aspects of their earnings call is likely to be their 2026 guidance. Can IBM forecast something better than where they are now? That could lift their stock value quickly, but they have to be careful about making the future look overly positive. Analysts will be assessing their free cashflow and their capex spending as well. If these numbers still do not look good by the time the report releases, then IBM stock could be in for another drop.

This is the most vital week for IBM this year. They have to prove that they are still worth investing in after a tremendous stock dropoff, and they can only do that with hard numbers and strong reassurances. Despite transparency over their spending and revenue, they face an uphill battle for credibility because of a securities fraud investigation. Allegations state that executives worked the sales pipeline to their advantage and broke the law to line their pockets. This is yet another serious issue the company will need to address soon, but the earnings call might not be the right place to do that.

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Timothy St. John

Financial Writer - European & US Desks

Timothy St John is a seasoned financial analyst and writer, catering to the dynamic landscapes of the US and European markets. Boasting over a decade of extensive freelance writing experience, he has made significant contributions to reputable platforms such as Yahoo!Finance, business.com: Expert Business Advice, Tips, and Resources - Business.com, and numerous others. Timothy's expertise lies in in-depth research and comprehensive coverage of stock and cryptocurrency movements, coupled with a keen understanding of the economic factors influencing currency dynamics. Timothy majored in English at East Tennessee State University, and you can find him on LinkedIn.

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