# Why IBM Shares Dropped 26% CEO highlights customer spending shifts towards AI infrastructure. - **Source:** [Economic Times](https://brifing.si/source/37791137-c35a-4ffe-b6a9-fe103afc9e48) - **Published:** 2026-07-14 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/eea2b861-04da-4c68-976e-76aa8ca887bf ## IBM's Quarterly Results IBM's second-quarter results fell short of expectations. A sudden shift in customer spending caused a 26% drop in stock prices. CEO Arvind Krishna noted that customers are prioritizing AI infrastructure. ## Spending Priorities In June, customers prioritized purchasing servers, storage, and memory for AI infrastructure. This shift negatively impacted IBM's Software and Infrastructure businesses. ## Mainframe Business IBM's mainframe business experienced a steeper decline than expected. Sales of Z systems and related software fell short of forecasts. ## Cybersecurity Concerns Rapidly evolving cybersecurity concerns delayed customers' technology purchasing decisions. This situation adversely affected IBM's quarterly performance. ## Resilient Areas IBM recorded an 11% increase in Red Hat revenues. Recently acquired companies like HashiCorp and Confluent performed strongly. The Distributed Infrastructure business saw a record 37% growth. ## Future Plans IBM continues to invest in AI and quantum computing. It launched Lightwell, a new AI-powered cybersecurity platform. The company reaffirmed plans to build a large-scale quantum computer by 2029. ## Sources covering this story - https://economictimes.indiatimes.com/markets/us-stocks/news/why-ibm-shares-crashed-26-ceo-arvind-krishna-highlights-customer-spending-shifts-towards-ai/articleshow/132398379.cms — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._