EXPLAINED: WHY DID IBM CRASH TODAY?!?

IBM crashed today, and the question everyone is asking is why. What's going on, guys? It's Ricky with TechBud Solutions. Hope that you guys are all having an amazing Tuesday. Let's go ahead and jump right into it. If you guys did not see the news, IBM lost 25% of its value today. 1/4 of its value wiped and in a very unfortunate fashion, marking its worst or biggest red day in the company's history. So, what exactly was reported today? It reported earnings. Again, we are entering earning season, so expect extreme volatility, especially with a lot of these AI manufacturers. July 14th, 2026, you can see that its EPS came in with a miss of 2.7% and a surprise of a miss of 3.7%. So, earnings were not terrible. So, what gives? Why did it release such terrible earnings? Uh or I'm sorry, why did it react in such a terrible manner, losing 25%? The first thing that I want to highlight is that it's just now trading at the same level that it was trading at 2 months ago. So, I think that's also the part that a lot of people are getting confused. The reason that IBM has been performing very well, it's just been 2 months and really just a 2 weeks if you actually take it into consideration. From the lows of $200 to the highs of $350, I bet you will not guess what sparked as a positive catalyst for IBM. Of course, Trump talked about it. He promoted it, causing the stock price to go up. It does this over and over again. Guess what happens? Again, it doesn't meet market's expectation. It got ahead of itself. It began trading at a big premium, and the company just was not there. What exactly was disclosed today that shocked investors in wanting to sell and leading to its biggest sell-off in a single day? So, the CEO said that there's been a shift spending towards servers, storage, and memory late in the quarter as they rushed to secure supply ahead of expected price increases. So again, shifting money into memory or storage companies instead of companies like IBM. Um the big thing here is that again, it's not just impacting or negatively impacting IBM. It's also negatively impacting Microsoft, Salesforce, ServiceNow, and Workday. The weakness is spreading across software sectors. So that's the first thing that I wanted you to understand is the why. IBM was trading at a premium and again, it performed very well for a very short period of time. You could see that was incredibly volatile. Now it's giving back all that it gained and it's you know, people continue to highlight oh it's had its worst trading day you know, in a really long time. It's time to buy the dip. What? Again, you can buy the dip if you want, but I want to remind you we were trading at these exact levels just two months ago. It's nothing special. Why weren't you so desperate or eager to buy it then? Again, it was overvalued then. It just got a tweet from Trump that promoted it and pumped it to new all-time highs. That's it. It was a short-lived positive catalyst. If you look at IBM again using the Investing Pro software, it's it's the first link in the description down below if you want to download it yourself. The thing that I want to show you is that based off of fair value analyst, it does say that there's 31% upside. It is trading at a relatively low P ratio of 19 times its earnings and it is a very successful company in the sense that it produces revenue of 68 billion and a net income of 10 billion dollars. But guess what? Again, there's a lot of uncertainty about the actual demand that IBM is set to experience in the up and coming quarters because of the overinvestment that is happening with again, companies like Micron, companies like SanDisk that are absolutely dominating the marketplace. IBM just simply is falling behind. This isn't a surprise. This is why it was selling off before from $300 per share from the start of 2026 down to lows of $200 per share. This isn't new for IBM. Don't get me wrong. It is at an oversold range technically and it is at a previous support range. There could always be a dead cat bounce, but again, I also wouldn't be surprised if it breaks that support and continues to spiral even lower. The reason why is that again, it was already forming lower highs and lower lows before the Trump administration came in to try to pump up the stock and line their pockets. With that being said, again, technically speaking, I can see eye to eye why it could be viewed as an oversold reversal, which is why again, I'd be more than happy to add it to my watch list, but would I actually view it as a long-term trade? I personally would not. It doesn't mean that you can't. It just doesn't meet my criteria based off of its price performance. Again, I'm not a big fan for my long-term investments to be crashing 30 40% then running up 60% just to crash all over again. That is not the type of investment that I want to be invested in. Very simple. The Nasdaq market as of right now is still trading at again the same range from lows of 700 to the highs of 740. There has not been a break of pattern just yet. The thing that I do want to update you on is that Iran announced its full withdrawal from the MOU due to the US violations. So now they are saying that they are fully not going to meet the US to negotiate with us. This really sparked a negative reaction from Trump and saying that if Iran does not meet the US at the negotiating table, that the US will start to attack their power plants and their bridges. Again, feel free to look it up yourself. These are tweets that he directly shared on his platform, Truth Social. Also, again, an update, a lot of a lot of people, including myself, were sharing the news of Lucid filing for bankruptcy. That was the news that was shared all morning that caused the stock to sell off 47%. It has now recovered 90% and is now only down 17% on the day. I don't know how negative news can be shared that isn't true that drove so much selling pressure for the stock just for it to recover. I wonder, again, if there is any truth behind it, and I can't even imagine getting margin called for those that got liquidated, and then just to find out the news was fake. So, terrible news, very unfortunate, but I use this with my LPP team as an extreme example of, again, markets are so irrational right now. You can never be too safe in any position. So, just make sure that you don't over-leverage yourself in a position where you can get forced to be liquidated. So, again, as of right now, a lot of the semiconductor stocks are pushing up higher. You have Sandisk during the overnight hours up 1.87%. You have Micron up 1.97% at now $1,000 per share. We'll see how they actually end up trading tomorrow at market open, and I hope to see you there for our live trading session. Remember, I go live every single day right at market open, and if you like to start your mornings with us, all you have to do is click that second link down below, join our team, and we'll see you for our live trading session. Like always, let's make sure that we end the year on a green note. Take care, team.