International Business Machines continued its recovery on Thursday, rebounding 3.03% to $217.60 after staging a dramatic turnaround from Tuesday's historic selloff. The stock had tumbled 25% in the previous session following disappointing preliminary second-quarter results, but Thursday's gains represent a significant recovery that has now recovered roughly a quarter of the losses from Tuesday's historic wipeout. The broader US software sector has joined the rally, with Accenture gaining 4.53% to $143.23, Salesforce climbing 3.58% to $172.98, and Cognizant Technology Solutions advancing 2.11% to $44.09 as of 1:40 p.m. EDT, according to Bloomberg. The recovery momentum has extended to US-listed Indian IT stocks, with Wipro futures trading over 1% higher at $1.89 and Infosys ADRs marginally rising to $11.2 as of 8:08 a.m. EST, though the gains have since pared back during regular trading hours.
International Business Machines experienced its steepest-ever single-day decline, plunging 25.21% following disappointing preliminary quarterly results that rattled the broader technology sector. The negative sentiment immediately spilled over to US-listed Indian IT stocks, with Infosys ADRs falling 4% and Wipro ADRs declining 3% according to LiveMint. Other software and IT services companies, including Accenture, Salesforce, Microsoft, Cognizant and Autodesk, also slipped 1.5% to 3%. The sharp selloff wiped out nearly $67 billion to $70 billion in IBM's market value in a single trading session, creating widespread concern across the technology sector. On Wednesday, July 15, the Nifty IT index declined around 2%, underperforming the broader market as the benchmark Nifty 50 and Sensex gained around 0.5% each. Latest market data shows Indian IT stocks declined up to 2.5% as investors assessed the implications of slowing enterprise technology spending.
International Business Machines reported preliminary second-quarter revenue of $17.2 billion, up just 1% from a year earlier, falling short of analysts' estimates of $17.9 billion according to Bloomberg. The company attributed the miss to customers shifting their spending to chips and servers amid AI-fueled shortages, with infrastructure revenue declining 7% during the quarter. IBM's adjusted earnings per share 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 explained that customers accelerated hardware purchases to secure supply-constrained infrastructure ahead of expected price increases, leading to a larger-than-anticipated shift in capital expenditure. The negative sentiment was amplified when IBM shares plunged over 25% on the NYSE mid-Tuesday, resulting in the company wiping out nearly $67 billion to $70 billion in market capitalization.
Among the Nifty IT constituents, TCS was the biggest loser, declining around 2% on Wednesday, July 15, according to LiveMint. 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. Latest trading data shows TCS shares trading at ₹2,190.10, down 0.48% as of 11:49 AM IST on July 15, with the stock opening at ₹2,174.10 and touching an intraday high of ₹2,202.90. Infosys shares traded at ₹1,080.20, down 1.16%, opening at ₹1,079.00 and hitting an intraday high of ₹1,088.10. Wipro shares were trading at ₹176.15, down 0.56%, opening at ₹175.12 and touching an intraday high of ₹176.60. HCLTech emerged as the only positive performer, trading at ₹1,172.20, up 0.47%, despite remaining volatile as investors reacted to broader IT sector weakness.
The development comes at a time when the Indian IT sector is already grappling with multiple headwinds. Stocks have remained under pressure this year amid weak discretionary spending, slower deal closures and growing concerns that AI-driven automation could reduce demand for traditional IT services. Brokerages had earlier projected a muted June quarter for large Indian IT companies, with revenue growth expected to remain subdued as clients continue to scrutinise technology spending. Analysts had also warned that FY27 growth guidance could come under pressure if demand failed to improve across key verticals such as banking, retail, manufacturing and communications. IBM's update has reinforced those concerns, with the key takeaway being not just weaker software demand but a broader shift in enterprise technology spending where companies appear to be prioritising investments in AI infrastructure before allocating budgets to software and IT services.
Despite the recent decline, Indian IT stocks have demonstrated strong performance in July 2025. The Nifty IT index is the second-best sectoral gainer so far in the month with a 9% advance, according to CNBC TV18. Companies such as TCS and HCLTech have both reported results for the June quarter, with TCS results largely in-line with subdued expectations and HCLTech's results not as bad as feared. LTM's management has expressed optimism on the company's growth and margin outlook for the second half of the year. Shares of Infosys, HCLTech and TCS are all up between 8% and 9% so far in July, while those of Tech Mahindra and Wipro are up between 4% to 6%. The gains on the Nifty IT have been led by midcap names, with Persistent Systems rising over 18% and LTM gaining 15% despite some cautious analyst commentary after its results.
