IBM (IBM) Stock Crashes 22% as Apple (AAPL) Downgraded While Chip Stocks Rebound

Table of Contents

Key Highlights

IBM stock crashed 22% following disappointing second-quarter results that fell short of Wall Street forecasts
KeyBanc downgraded Apple to Underweight, expressing concerns over weakening demand for iPhones and other devices
Tower Semiconductor jumped 18% after unveiling a $3 billion manufacturing expansion in Japan
JPMorgan dipped despite exceeding Q2 projections; Bank of America and Wells Fargo advanced
Semiconductor stocks including AMD, Intel, and Micron rebounded following Monday’s decline

Tuesday morning delivered a flurry of market-moving developments for traders. Financial institution earnings rolled in alongside anticipation of the June consumer price index inflation data, creating a complex landscape before markets opened.

JPMorgan declined 1.4% in premarket trading despite delivering second-quarter results that surpassed analyst projections on both revenue and profit. Bank of America advanced 1.9% while Wells Fargo rose 1.4%, with both banks exceeding forecasts. Citigroup and Goldman Sachs were scheduled to release their quarterly numbers later in the session.

IBM emerged as the session’s most significant decliner. The stock plummeted 22% after the technology giant released preliminary second-quarter figures that disappointed on both top and bottom lines. The company reported $17.2 billion in revenue alongside operating earnings of $2.93 per share, figures that came in below consensus estimates.

IBM Stock Card
International Business Machines Corporation, IBM

Chief Executive Arvind Krishna characterized the quarter as “disappointing.” He attributed the underperformance to postponed closings of major deals, softer mainframe demand, and customers redirecting their budgets toward servers and storage solutions. The infrastructure segment saw revenue decline 7%, while consulting operations remained stagnant.

However, IBM highlighted that its Red Hat division achieved 11% revenue expansion. Management expressed continued conviction in the company’s strategic direction ahead of comprehensive earnings disclosures scheduled for later this month.

Tower Semiconductor Surges on Japan Expansion

Tower Semiconductor delivered the morning’s strongest performance, soaring 18%. The semiconductor manufacturer revealed plans for approximately $3 billion in capital investment to broaden chip production capabilities in Japan, supported by roughly $1 billion in government subsidies.

Tower elevated its 2028 financial outlook, forecasting $3.6 billion in revenue and $1.2 billion in net earnings. The strategic expansion targets growing requirements from artificial intelligence and data center markets.

Broader semiconductor equities also climbed higher. Advanced Micro Devices increased 2%, Intel appreciated 2.5%, Micron advanced 3.4%, and Nvidia ticked up 0.4%. The chip sector had experienced selling pressure on Monday, making Tuesday’s movement a partial reversal.

Apple slipped 1.3% after KeyBanc analyst Brandon Nispel lowered his rating on the shares from Sector Weight to Underweight, establishing a $250 price objective. The analyst highlighted decelerating sales across iPhone, MacBook, and iPad product lines, cautioning that diminishing carrier subsidies might extend device upgrade timelines. KeyBanc additionally questioned whether Apple’s current valuation multiple can be supported at prevailing price levels.

Ericsson tumbled 9% even after surpassing profit expectations. Revenue contracted 6% on a year-over-year basis to SEK 52.7 billion, falling short of forecasts primarily due to reduced patent-licensing revenues. The telecommunications equipment maker also disclosed that CEO Börje Ekholm will step down on September 30, 2026, with Per Narvinger designated as his successor.

Penguin Solutions declined 5% after revealing intentions to issue $650 million in convertible debt securities. MBX Biosciences dropped 6% in the wake of an executive transition, with Steve Hoerter appointed as the new chief executive officer.

BP climbed 1.5% after indicating expectations for improved oil trading performance as Middle Eastern geopolitical tensions influence crude oil pricing dynamics.

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