IBM forecasts preliminary Q2 revenue below estimates as spending shifts to AI, triggering a SaaS sell-off

July 14 (Reuters) - IBM's preliminary second-quarter revenue forecast came below ‌Wall Street estimate on Tuesday, ‌as customers prioritized spending on AI infrastructure, ​including servers, storage and memory purchases, sending its shares slumping 17% in premarket trading.

The results reflect ‌an industry-wide ⁠shift in technology spending toward AI infrastructure, reducing budgets ⁠for traditional software.
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According to the preliminary results, the company expects revenue ​of $17.2 billion ​during the ​quarter, compared with ‌analysts' estimate of $17.86 billion, according to data compiled by LSEG.

Adjusted earnings per share is expected to be $2.93, compared with the estimate of $3.02.

IBM ‌CEO Arvind Krishna ​said in a ​letter to ​investors that in this ‌quarter the company "faltered" in ​adapting quickly ​enough to the evolving market conditions, leading to "numerous large deals" ​not ‌closing as expected.

Source: [Yahoo Finance](https://finance.yahoo.com/markets/stocks/articles/ibm-expects-second-quarter-revenue-111029599.html)