IBM has cut its annual revenue growth forecast due to customers shifting their spending towards AI-focused data-center gear. The company now expects 2026 revenue growth between 4% and 5%, down from its previous expectations of more than 5% growth.
Impact on the Software Industry
The forecast has raised concerns that the scramble for AI hardware could lead to a decrease in spending on the wider software sector. However, some analysts believe that the impact may be limited, as IBM’s mainframe business has been a significant contributor to the company’s weakness.
Revenue from IBM’s Z mainframe slumped 42% in the second quarter, dragging infrastructure revenue down 7% to $3.84 billion. Despite this, the company’s software revenue rose 5% to $7.76 billion, although it missed an average estimate of $7.88 billion.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
