IBM Warns of Weak Second Quarter as AI Spending Rotates to Cybersecurity

According to CNBC, IBM said Tuesday that second-quarter results would disappoint, sending its shares down 25% for their worst day on record and leaving the stock down more than 26% for the week. Chief Executive Arvind Krishna said customers are shifting technology budgets toward cybersecurity, hardware and AI tokens, reducing spending on traditional software and consulting and pushing some large deals into later quarters. The report triggered gains in cybersecurity names including CrowdStrike and Palo Alto Networks, while software stocks such as Salesforce and ServiceNow fell. The piece also said investors rotated out of some semiconductor names and into hyperscalers, with the VanEck Semiconductor ETF falling nearly 9% for the week as ASML raised its full-year sales outlook and Taiwan Semiconductor increased its capital spending forecast.