IBM stock drops 6.5% over revenue concerns

IBM's shares declined by 6.5% in pre-market trading after analysts' expectations raised concerns about the sustainability of softwarerevenue recovery in the third quarter. The forecasts indicated that part of the improvement was due to postponed deals from the previous quarter, rather than sustained demand. Although the company raised its full-year software revenue growth outlook to between 7% and 8%, analysts believe the impact of these deferred deals may fade soon, potentially limiting the growth of the business units. The transaction processing unit, which handles mainframes, grew by 9%, but CEO Arvind Krishna anticipated this rate would decline as the year progresses, with a possible drop in fourth-quarter sales due to reduced support from postponed deals. Since the beginning of the year, IBM's stock has lost about 15% of its market value, despite some institutions issuing positive price forecasts. However, the company's ability to turn temporary revenue growth into sustainable growth remains under watch.

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