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IBM CEO Calls Software Slowdown Temporary, Forecasts 2026 Growth

7/24/2026

49 3 Full Breakdown

Summary

Krishna forecasts rebound

IBM CEO Arvind Krishna said the software slowdown is temporary and expects recovery within a year.
He said only 2% of IBM’s software could be replaced by AI-generated applications.
A 60% semiconductor price rise pushed customers to buy hardware, delaying deals.
Software accounts for 45% of IBM revenue.
Jim Kavanaugh projects 6%-8% software growth in 2026 and a $1 billion cash-flow increase.

Summary

IBM Shares Rebound

IBM shares have fallen about 32% year-to-date, reflecting investor concerns despite AI optimism.
IBM stock rose about 3% in after-hours trading after earnings, closing the day 0.13% lower and ending the session 2.25% down.
Stocktwits showed bullish sentiment for IBM with high message volume in the past 24 hours.
About 80% of IBM’s software revenue is recurring, with the firm reporting no customer exits from its mainframe business.

History

Historical Context

IBM recorded a $2.5 billion quarterly loss in 2000 as the dot-com bubble peaked on March 10 2000, when the NASDAQ Composite hit 5,048.62 before plunging 78% by October 2002. The crash erased about $1.755 trillion in tech market value, teaching investors that rapid optimism can quickly erode cash flow and shaping scrutiny of IBM’s later earnings.

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Krishna forecasts rebound

IBM CEO Arvind Krishna said the software slowdown is temporary and expects recovery within a year.
He said only 2% of IBM’s software could be replaced by AI-generated applications.
A 60% semiconductor price rise pushed customers to buy hardware, delaying deals.
Software accounts for 45% of IBM revenue.
Jim Kavanaugh projects 6%-8% software growth in 2026 and a $1 billion cash-flow increase.

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