IBM bets on AI strategy as it trims costs amid earnings miss

IBM's Q2 results showed revenue up 1% to $17.2 billion and diluted EPS of $2.93, meeting forecasts after a prior warning that had spooked investors. CEO Arvind Krishna defended the company’s AI strategy as central to its hybrid cloud and quantum ambitions, while pushing cost cuts to lift margins (aiming for more than $5.5 billion in annual run-rate savings). With infrastructure sales down about 7% and software growth around 5%, IBM retained a 2026 revenue-growth outlook of 4-5% in constant currency and dismissed breakup rumors, emphasizing its integrated portfolio. Shares rose roughly 2% after the report.