San Francisco – September 15, 2026 -- Shareholder rights firm Hagens Berman is investigating International Business Machines Corporation (NYSE: IBM) for potential securities law violations after CEO Arvind Krishna disclosed a Q2 2026 earnings shortfall on July 14, 2026 that wiped out over $68 billion in market capitalization in a single trading day, sending IBM shares down 25%.
IBM's Z mainframe business drove a sudden reversal from prior growth guidance
On April 22, 2026, IBM reported quarterly revenue gains of 15% in Infrastructure, 28% in Hybrid Infrastructure, and 51% in IBM Z, with management projecting constant-currency revenue growth of "5-plus percent" for 2026 and a similar growth rate for the second quarter. Executives at the time called it a "tremendous start" and a "record start" for the z17 mainframe, launched in April 2025 as IBM's flagship system for large-scale AI processing.
Q2 results fell far short of guidance within three months
By July 14, 2026, IBM disclosed total revenue growth of just 1% and a 7% decline in Infrastructure revenue -- a sharp contrast to the 5-plus percent growth previously promised. Krishna attributed the miss to a shortfall in Z performance and its associated software stack, primarily in Transaction Processing, stating that "numerous large deals failed to close" and that customers had undertaken "capex reprioritization." He acknowledged the company "did not adapt and move quickly enough."
Hagens Berman scrutinizes timing of IBM's disclosures
Hagens Berman partner Reed Kathrein said the firm is examining whether IBM had information indicating large deals were unlikely to close on time during the second quarter, given what he described as the abruptness of the negative announcement. The firm is soliciting IBM investors with substantial losses and individuals with non-public information relevant to the probe, including potential SEC whistleblowers eligible for awards of up to 30% of any successful recovery.