IBM has cut its annual revenue growth forecast due to customers prioritizing AI infrastructure spending over software and mainframe computers. The company now expects 2026 revenue growth between 4% and 5%, down from its previous expectations of more than 5% growth. IBM's mainframe business declined 42% in the second quarter.
CEO Arvind Krishna attributed the shortfall to customers redirecting budgets toward other hardware and data center equipment amid steep price increases driven by AI-related demand for components. Krishna reassured investors that AI won't disrupt the company's software unit, citing that only 2% of IBM's software could be replaced with applications built with AI models.
Meanwhile, Alphabet has raised the top end of its CapEx plan for this year to $205 billion, driven by increasing AI investment. The company's AI spending increased by 50% year-over-year. Meta is also making significant investments, with a potential $10 billion deal with Anthropic. Google, a subsidiary of Alphabet, is also accelerating its AI efforts.
In other news, S&P Global Market Intelligence has partnered with Farsight to launch an AI-powered financial workflow capability for Capital IQ Pro. This new capability will allow users to create high-quality, AI-powered financial documents in a fraction of the time.
Key Takeaways
['IBM cuts revenue forecast due to AI infrastructure spending surge', "IBM's mainframe business declined 42% in Q2", "CEO Arvind Krishna: AI won't disrupt IBM's software unit", 'Alphabet raises CapEx plan to $205 billion for AI investment', 'Meta considers $10 billion deal with Anthropic', 'S&P Global partners with Farsight for AI-powered financial workflow']IBM Cuts Revenue Forecast as AI Spending Surges
IBM cut its annual revenue growth forecast due to customers prioritizing AI infrastructure spending over software and mainframe computers. The company's shares dipped after the announcement. IBM now expects 2026 revenue growth between 4% and 5%, down from its previous expectations of more than 5% growth. The company's mainframe business declined 42% in the second quarter.
IBM Cuts Revenue Forecast as AI Spending Surges
IBM cut its annual revenue growth forecast due to customers prioritizing AI infrastructure spending over software and mainframe computers. The company's shares dipped after the announcement. IBM now expects 2026 revenue growth between 4% and 5%, down from its previous expectations of more than 5% growth. The company's mainframe business declined 42% in the second quarter.
IBM's Earnings Miss Tied to AI-Driven Hardware Cost Surge
IBM reported disappointing quarterly earnings, with results falling short of Wall Street expectations. CEO Arvind Krishna attributed the shortfall to customers redirecting budgets toward other hardware and data center equipment amid steep price increases driven by AI-related demand for components.
Krishna Reassures Investors on AI Impact on Software Unit
IBM CEO Arvind Krishna told CNBC that AI won't disrupt the company's software unit, citing that only 2% of IBM's software could be replaced with applications built with AI models. Krishna expressed confidence that affected customers will eventually return to purchase new mainframes and associated software contracts.
New Framework for Explainable Time Series Forecasting
Researchers propose a domain-agnostic framework for generating grounded natural language explanations for time series forecasts. The framework consists of three components: extraction of structured explanatory factors, evidence-conditioned explanation generation, and scalable evaluation.
S&P Global Partners with Farsight for AI-Powered Financial Workflow
S&P Global Market Intelligence partners with Farsight to launch an AI-powered financial workflow capability for Capital IQ Pro. The new capability will allow users to create high-quality, AI-powered financial documents in a fraction of the time.
Sophisticated Inference and Epistemic Priors
Researchers discuss the role of sophisticated inference and epistemic priors in active inference. The study evaluates different variational objectives and finds that methods without an epistemic component do not seek information.
Meta's Anthropic Deal Could Impact AI Story
The article discusses Meta's potential $10 billion deal with Anthropic and its implications for the AI story.
New York High School Gets AI-Powered Robot Assistant
A New York high school is getting an AI-powered robot assistant, but parents and teachers have concerns about its implementation.
Agentic AI ROI: Executives Need Proof
Executives are seeking concrete ROI from agentic AI, focusing on data, governance, and scalability for measurable business impact. Traditional ROI calculations fall short for agentic AI, as benefits extend beyond mere cost reduction.
Teachers Unions Expand DEI Efforts into AI
A new report claims teachers' unions are increasingly focusing on artificial intelligence as a way to advance diversity, equity, and inclusion initiatives in schools.
Alphabet Accelerates AI Investment
Alphabet raised the top end of its CapEx plan for this year to $205 billion, driven by increasing AI investment. The company's AI spending increased by 50% year-over-year.
AI Concerns and Image Sharing
A reader expresses concerns about AI usage of shared family images and seeks advice on setting boundaries with friends and family.
Sources
- IBM cuts annual revenue growth forecast as customers prioritize AI infrastructure spending
- IBM cuts annual revenue growth forecast as customers prioritize AI infrastructure spending
- IBM’s Earnings Miss Tied to AI-Driven Hardware Cost Surge, CEO Says
- IBM's Krishna tries to reassure investors that AI won't disrupt company's software unit
- Using LLMs for Explainable, Data-Driven Insight Generation from Time Series
- S&P Global Market Intelligence Partners with Farsight to Launch AI-powered Financial Workflow Capability for Capital IQ Pro
- Sophisticated Policies from Epistemic Priors
- Meta’s $10 Billion Anthropic Deal Could Change the AI Story. How to Play META Stock Here.
- A New York High School Is Getting an AI-Powered Robot Assistant. Parents and Teachers Have Concerns
- Agentic AI ROI: Executives Need Proof
- Report claims teachers unions are expanding DEI efforts into artificial intelligence
- Alphabet Accelerates Its AI Investment
- Asking Eric: AI scares me. How do I make sure shared family images don’t end up as deepfake content?
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