IBM reported Q2 revenue of $17.2 billion, missing analyst expectations of $17.6 billion and growing just 1% year-over-year. The company simultaneously lowered its 2026 forecast, citing weakness across core business segments.
Infrastructure revenue declined 7% to $3.8 billion, with the Z mainframe division—a historically profitable unit—dropping 42%. The performance shortfall signals continued pressure on IBM's legacy hardware business as enterprises shift computing workloads to cloud platforms.
The company's profit margins contracted beyond analyst projections, adding to investor concerns about its strategic direction. IBM has been attempting to reposition itself as a hybrid cloud and AI services provider, but results suggest the transition is not offsetting declines in traditional infrastructure revenue.
The lowered 2026 forecast indicates management expects near-term headwinds to persist. Analysts will scrutinize whether IBM's software and services segments—which have shown relative strength—can accelerate growth enough to stabilize overall performance. The mainframe revenue collapse is particularly notable, as these systems remain critical for enterprise operations and typically carry high margins.
Six Chinese artificial intelligence companies face allegations of systematically copying frontier AI models developed by US firms. The US government is urging AI companies to identify Chinese users and downgrade them to less-capable versions of their systems.
New CEO John Ternus doubled down on the iPhone as Apple's core product in his first keynote, echoing a strategic commitment Steve Jobs made 25 years ago.
Google is rolling out a Live Game Feed feature for NFL games, offering real-time updates, play-by-play commentary, and AI-powered insights directly in search results on mobile.
Florida's attorney general filed a lawsuit Wednesday against Netflix, claiming the streaming platform misleads parents about data collection practices on minors and uses design features that encourage excessive viewing.