IBM suffered its steepest stock decline in 115 years on July 14, plunging about 25% and wiping out roughly $67 billion in market capitalization after the company warned that second-quarter revenue would fall short of Wall Street estimates. The drop surpassed IBM's Black Monday loss of 23.7% in 1987, raising fresh concerns about whether the artificial intelligence sector is overheating.
Revenue miss triggers historic sell-off
The tech giant said it expects second-quarter revenue of approximately $17.2 billion, well below the $17.85 billion analysts had forecast. CEO Arvind Krishna described the results as "worse than our expectations," citing rising chip costs and difficulty adapting to shifting corporate spending priorities. Businesses are increasingly funneling money into AI infrastructure, but IBM is not capturing enough of that spending, the company indicated.
The stock fell to around $217 per share, leaving IBM valued at just under $205 billion. The single-session loss was the largest in the company's history, eclipsing even the 1987 crash.
AI bubble debate reignites
Economist Steve Hanke, who has warned since at least May 2026 about a "dual bubble" forming in AI markets, said IBM's miss fits into a broader macroeconomic pattern. He compared the current AI stock frenzy to the dot-com era and pointed to recent bank earnings as further evidence of trouble. Hanke declined to comment specifically on IBM's mechanics, instead suggesting the problem extends beyond one company.
The crash has intensified questions about whether AI-related stocks are overvalued. IBM's struggles come as enterprise spending shifts toward AI infrastructure, but the company has not kept pace with rivals like Microsoft and Google.
Implications for crypto and blockchain
IBM has been a major corporate backer of blockchain technology through its Hyperledger contributions and enterprise distributed ledger projects. A financially weakened IBM could scale back those investments, slowing institutional blockchain adoption at a time when supply chain and financial services applications were gaining momentum.
For crypto investors, the risk is that AI disillusionment triggers a broad "risk-off" move that drags down digital assets alongside equities. The March 2020 crash, when Bitcoin fell with stocks before later decoupling, offers a recent precedent. If AI sentiment sours further, crypto could face short-term pressure even if its long-term fundamentals remain intact.