Indian IT stocks, including Infosys, Wipro and Tech Mahindra, are expected to remain under pressure after IBM’s disappointing quarterly outlook triggered a sharp sell-off in global technology shares. The weak results have also raised concerns about enterprise technology spending ahead of the earnings season for major Indian IT companies.

IBM shares plunged 25.21 per cent on Tuesday after the company reported preliminary second-quarter results that fell short of market expectations, marking its biggest single-day decline in decades.

IBM misses estimates on revenue and earnings

IBM reported preliminary second-quarter revenue of $17.2 billion, below analysts’ expectations of $17.86 billion. Adjusted earnings per share came in at $2.93, missing the projected $3.02.

The company’s software revenue increased 5 per cent year-on-year, consulting revenue remained flat, while infrastructure revenue declined 7 per cent. IBM’s non-GAAP gross margin also narrowed to 59.4 per cent, reflecting weaker profitability.

Infosys and Wipro ADRs fall

The negative sentiment spread to Indian IT stocks listed in the United States. Infosys ADR declined 3.91 per cent to $11.05, while Wipro ADR fell 3.16 per cent to $1.84 after US markets closed.

The weakness in ADRs indicates that Indian IT companies could face selling pressure when domestic markets open.

AI spending shifts client priorities

IBM Chairman and CEO Arvind Krishna said customers increasingly shifted their technology budgets towards AI infrastructure, including servers, storage systems and memory chips, instead of enterprise software and consulting services.

This change delayed several major software and infrastructure deals, contributing to the company’s weaker-than-expected performance.

As IBM is widely regarded as a key indicator of global enterprise technology spending, its cautious outlook has heightened concerns that businesses may continue prioritising AI hardware investments over discretionary IT services in the near term.

Investors await Indian IT earnings

Market participants will now closely watch the upcoming quarterly results from Infosys, Wipro, Tech Mahindra and other Indian IT firms to assess whether similar demand challenges are emerging in India’s technology sector.

IBM is scheduled to release its detailed second-quarter financial results on July 22, when investors expect further clarity on global technology spending trends.#Infosys #Wipro #IBM #IndianIT #StockMarket #Technology #Business #NewsKarnataka