International Business Machines Corp. saw its stock plunge 10% at Thursday's open despite reporting first-quarter revenue growth of 9% to $7.05 billion, exceeding analyst estimates. The infrastructure and software giant posted net income of $1.22 billion ($1.28/share), up from $1.06 billion ($1.12/share) in Q4 2024, but maintained full-year guidance of constant currency revenue growth above 5%—a figure Wall Street interprets as cautious amid its recent Confluent acquisition.

Investors appear more focused on artificial intelligence's disruptive potential than IBM's financial performance. The stock has declined 15% year-to-date through Wednesday's close, underperforming the S&P 500's 4% gain. Software revenue grew 11% to $7.05 billion, slightly above the $7.02 billion consensus, yet couldn't offset broader tech sector anxieties.

IBM now joins other tech stocks caught in the recent selloff, with software companies particularly vulnerable to AI-driven market reassessments. The earnings beat ultimately proved insufficient to calm nerves about technological disruption in legacy enterprise systems.