IBM CEO addresses Wall Street tech panic after delayed enterprise software deals surge back - Fox Business

What the report says

Fox Business reported that IBM Chief Executive Arvind Krishna sought to calm investor concerns after a weaker second quarter, saying on “The Claman Countdown” that about one-third of large enterprise software deals delayed during the period had already returned. Krishna characterized the slowdown as a short-term deferral rather than lost demand, while acknowledging that the pattern was not yet definitive proof of a full recovery.

According to the report, IBM had reduced its full-year revenue growth outlook from more than 5% to a range of 4% to 5%. The company’s warning followed a sharp increase in chip hardware prices, which Krishna said led major corporate customers to shift capital spending toward physical servers. That reallocation affected IBM’s upfront software sales and contributed to pressure on the company’s stock.

Krishna said the episode highlighted a vulnerability in IBM’s software mix. Fox Business reported that about 80% of IBM’s software revenue comes from subscriptions, while roughly 20% comes from upfront purchases, the area most affected by the delayed deals. Krishna said IBM plans to put more emphasis on expanding the subscription side and reducing reliance on faster growth from upfront transactions.

The interview also touched on IBM’s longer-term technology strategy, including artificial intelligence and quantum computing. Krishna described AI as a continuing growth driver and said IBM is increasing investment in quantum technologies, including through its acquisition of HRL Laboratories. The development matters because IBM’s results are being watched as a gauge of enterprise technology spending and whether recent weakness reflects temporary budget timing or a broader pullback.