On June 2nd, IBM (International Business Machines) was riding high, up 13 per cent for the year, trading at record levels. It looked like proof that legacy tech could still win in the AI race. But 42 days later, that story collapsed. IBM shares crashed 25 per cent on Tuesday to mark the steepest single-day plunge since the stock started trading in 1968. The stock is now down roughly 35 per cent from its June peak and over $100 billion in market value, gone. The trigger: a preliminary earnings warning, released eight days ahead of schedule. IBM projected adjusted earnings of $2.93 per share against Wall Street's $3.01 estimate, on revenue of $17.2 billion versus expectations of $17.86 billion. Small miss on paper, but a massive market reaction. The real story is what's underneath.Also read | <a href="https://www.wionews.com/business-economy/deadly-earthquakes-leave-venezuela-facing-a-massive-economic-recovery-1783934581802">Deadly earthquakes leave Venezuela facing a massive economic recovery</a> CEO Arvind Krishna admitted, "This quarter we faltered", pointing to a global memory chip shortage that has pushed clients to redirect spending towards servers, storage and memory instead of software and mainframes. Memory giants Samsung, SK Hynix and Micron have redirected production towards AI data centre chips, leaving 2026 capacity effectively sold out, and Micron's CEO expects tight conditions through 2027. This isn't isolated. IBM's slide rattled the wider software sector, Salesforce fell 4 per cent, Microsoft nearly 3 per cent, and the IGV software ETF dropped 2 per cent. Meanwhile, Micron rose, and storage firm SanDisk jumped nearly 6 per cent. That shows capital rotating from software into hardware in real time. So, AI's infrastructure buildout is now powerful enough to reshape enterprise budgets overnight, rewarding chipmakers while punishing software incumbents who assumed steady demand. IBM's July 22nd earnings call will show whether this is a temporary supply squeeze or the first crack in software's AI-era business model.Watch | IBM shares plunge 25% after shock earnings warning, ai chip shortage hits software demand<a href="https://www.wionews.com/videos/ibm-shares-plunge-25-after-shock-earnings-warning-ai-chip-shortage-hits-software-demand-1784181411869/embed">https://www.wionews.com/videos/ibm-shares-plunge-25-after-shock-earnings-warning-ai-chip-shortage-hits-software-demand-1784181411869/embed</a>&nbsp;

IBM’s $100B crash (its worst since 1968) signals a massive shift: enterprise budgets are rotating out of software and into AI hardware as a severe global chip shortage starves tech incumbents.

On June 2nd, IBM (International Business Machines) was riding high, up 13 per cent for the year, trading at record levels. It looked like proof that legacy tech could still win in the AI race. But 42 days later, that story collapsed. IBM shares crashed 25 per cent on Tuesday to mark the steepest single-day plunge since the stock started trading in 1968. The stock is now down roughly 35 per cent from its June peak and over $100 billion in market value, gone. The trigger: a preliminary earnings warning, released eight days ahead of schedule. IBM projected adjusted earnings of $2.93 per share against Wall Street's $3.01 estimate, on revenue of $17.2 billion versus expectations of $17.86 billion. Small miss on paper, but a massive market reaction. The real story is what's underneath. Also read | Deadly earthquakes leave Venezuela facing a massive economic recovery CEO Arvind Krishna admitted, "This quarter we faltered", pointing to a global memory chip shortage that has pushed clients to redirect spending towards servers, storage and memory instead of software and mainframes. Memory giants Samsung, SK Hynix and Micron have redirected production towards AI data centre chips, leaving 2026 capacity effectively sold out, and Micron's CEO expects tight conditions through 2027. This isn't isolated. IBM's slide rattled the wider software sector, Salesforce fell 4 per cent, Microsoft nearly 3 per cent, and the IGV software ETF dropped 2 per cent. Meanwhile, Micron rose, and storage firm SanDisk jumped nearly 6 per cent. That shows capital rotating from software into hardware in real time. So, AI's infrastructure buildout is now powerful enough to reshape enterprise budgets overnight, rewarding chipmakers while punishing software incumbents who assumed steady demand. IBM's July 22nd earnings call will show whether this is a temporary supply squeeze or the first crack in software's AI-era business model. Watch | IBM shares plunge 25% after shock earnings warning, ai chip shortage hits software demand https://www.wionews.com/videos/ibm-shares-plunge-25-after-shock-earnings-warning-ai-chip-shortage-hits-software-demand-1784181411869/embed

IBM’s $100B crash (its worst since 1968) signals a massive shift: enterprise budgets are rotating out of software and into AI hardware as a severe global chip shortage starves tech incumbents.

$100 billion wiped out: How AI hardware boom just crushed IBM

International Business Machines said on Monday it will appeal an Indiana judge&#39;s ruling that calls for the technology company to pay more than $78 million in damages to the state for failing to modernize the government&#39;s welfare system.

Marion Superior Court Judge Heather Welch ruled on Friday that Indiana was entitled to $128 million in damages for the breach of contract by the company. Welch also said&nbsp;IBM&nbsp;was entitled to nearly $50 million in damages for equipment fees and related costs, according to court documents.

IBM&nbsp;and Indiana in 2006 signed a contract under which the company would modernise the state&#39;s welfare system. But the state terminated the contract three years later, claiming&nbsp;IBM&nbsp;fell short of the stated goals.

&quot;IBM&nbsp;will appeal this decision which is contradicted by the facts and the law,&quot;&nbsp;IBM&nbsp;spokesman Clint Roswell said in a statement on Monday.

&quot;IBM&nbsp;worked diligently and invested significant resources ... to help turn around a welfare system described at the time by Indiana&#39;s governor as one of the worst in the nation,&quot; he added.

State officials said on Monday that they were pleased with the decision.

&quot;This is a very positive step forward to vindicate the actions the state took in 2009 to terminate the contract with&nbsp;IBM,&quot; Indiana Governor Eric Holcomb said in a statement. &quot;We look forward to the resolution of the lawsuit.&quot;

One of the state&#39;s attorneys, Peter Rusthoven, said&nbsp;IBM&nbsp;&quot;refused all along to take responsibility for its poor performance.&quot;

IBM&nbsp;and Indiana sued each other in 2010, alleging breach of contract.

The two cases were consolidated and a judge in 2012 found no breach of contract by&nbsp;IBM, which was awarded $49.5 million in past-due fees after a six-week bench trial in Marion Superior Court.

Both parties appealed and the state Supreme Court found last year that&nbsp;IBM&nbsp;breached the contract and sent the case to Welch&#39;s court to determine damages.

&nbsp;

Marion Superior Court Judge Heather Welch ruled on Friday that Indiana was entitled to $128 million in damages for the breach of contract by the company

International Business Machines said on Monday it will appeal an Indiana judge's ruling that calls for the technology company to pay more than $78 million in damages to the state for failing to modernize the government's welfare system. Marion Superior Court Judge Heather Welch ruled on Friday that Indiana was entitled to $128 million in damages for the breach of contract by the company. Welch also said IBM was entitled to nearly $50 million in damages for equipment fees and related costs, according to court documents. IBM and Indiana in 2006 signed a contract under which the company would modernise the state's welfare system. But the state terminated the contract three years later, claiming IBM fell short of the stated goals. "IBM will appeal this decision which is contradicted by the facts and the law," IBM spokesman Clint Roswell said in a statement on Monday. "IBM worked diligently and invested significant resources ... to help turn around a welfare system described at the time by Indiana's governor as one of the worst in the nation," he added. State officials said on Monday that they were pleased with the decision. "This is a very positive step forward to vindicate the actions the state took in 2009 to terminate the contract with IBM," Indiana Governor Eric Holcomb said in a statement. "We look forward to the resolution of the lawsuit." One of the state's attorneys, Peter Rusthoven, said IBM "refused all along to take responsibility for its poor performance." IBM and Indiana sued each other in 2010, alleging breach of contract. The two cases were consolidated and a judge in 2012 found no breach of contract by IBM, which was awarded $49.5 million in past-due fees after a six-week bench trial in Marion Superior Court. Both parties appealed and the state Supreme Court found last year that IBM breached the contract and sent the case to Welch's court to determine damages.

IBM to appeal judge's order to pay $78 million to Indiana

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$100 billion wiped out: How AI hardware boom just crushed IBM

IBM to appeal judge's order to pay $78 million to Indiana