TCS, Infosys to Wipro: IBM's worst crash since 1968 rattles Indian IT stocks. Here's what spooked investors

IT stocks today: Shares of Indian information technology (IT) companies, including Infosys, Tata Consultancy Services (TCS), Wipro, HCLTech, Persistent Systems, Coforge and others, declined on Wednesday, July 15, after their US-listed peer IBM suffered its biggest single-day fall since at least 1968 following a disappointing preliminary quarterly update that missed Wall Street expectations.

The Nifty IT index fell around 2%, underperforming the broader market, even as the benchmark Nifty 50 and Sensex gained around 0.5% each.

IBM reported weaker-than-expected second-quarter earnings and flagged a slowdown in enterprise software spending, raising concerns over demand trends for Indian IT companies ahead of their quarterly earnings announcements.

IBM's US-listed shares plunged 25.21% to close at $217.07 on Tuesday, marking the company's sharpest single-day decline in decades after its preliminary Q2 2026 results fell short of analyst estimates.

Among the Nifty IT constituents, TCS was the biggest loser, declining around 2%. Infosys, Persistent Systems, LTIMindtree and Wipro fell more than 1% each, while Mphasis, Tech Mahindra, L&T Technology Services, HCLTech and Coforge also traded in the red during intraday trade.

What triggered IBM's biggest one-day crash in decades?

IBM pre-announced second-quarter revenue of $17.2 billion and adjusted earnings per share (EPS) of $2.93, missing Wall Street estimates of $17.86 billion and $3.02, respectively. Separately, the company reported preliminary Q2 revenue of $17.2 billion, below consensus estimates of $17.9 billion, while adjusted EPS of $2.93 also missed expectations of $3.01.

During the quarter, software revenue increased 5% year-on-year, consulting revenue remained flat, while infrastructure revenue declined 7%.

IBM Chairman and Chief Executive Officer Arvind Krishna acknowledged the disappointing performance, saying the company "did not adapt and move quickly enough."

According to IBM, enterprise customers redirected technology budgets towards artificial intelligence (AI) infrastructure, including servers, storage and memory, instead of software spending. The company also pointed to delays in closing large enterprise deals amid changing AI dynamics.

Krishna attributed the earnings miss to weakness in the software and infrastructure businesses as customers shifted spending towards hardware such as memory chips. He also acknowledged that IBM failed to move "quickly enough," resulting in several deals not closing within the timelines the company had anticipated.

The sharp selloff erased nearly $70 billion from IBM's market capitalisation in a single trading session.

The weakness spilled over to other technology stocks. Infosys and Wipro American Depositary Receipts (ADRs) declined 4% and 3%, respectively, while shares of Accenture, Salesforce, Microsoft, Cognizant and Autodesk fell between 1.5% and 3%.

With IBM's disappointing earnings reviving concerns over enterprise technology spending, investors will closely watch the upcoming quarterly results of Indian IT companies for commentary on demand trends and client technology spending in the coming quarters.

Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.