IBM Bets Big on AI Strategy Amid Earnings Hurdle and Cost-Cut Push

IBM reported Q2 revenue of $17.2 billion (+1% YoY) and non-GAAP EPS of $2.93, roughly in line with estimates after an earlier earnings warning. Infrastructure sales fell ~7% while software grew ~5%; IBM maintained its 2026 revenue-growth target of 4–5% and is accelerating cost cuts to exceed $5.5 billion in annual savings to support growth, margins, and R&D. CEO Arvind Krishna defended IBM’s AI roadmap—built around hybrid cloud, AI, and quantum—and knocked down breakup chatter, stressing the company’s strength as an integrated portfolio. Shares rose about 2% after the report, but investors will want several improved quarters to rebuild trust.