IBM recently released its latest quarterly report, achieving $17.2 billion in quarterly revenue and $2.2 billion in net profit, but the overall performance still fell far short of Wall Street's expectations. Due to a severe decline in the infrastructure business, the company's stock price even plummeted by a record 25% in a single day, forcing executives to lower the full-year growth outlook.

Surging Costs Squeeze Customer Budgets

The main reason for the declining performance was a significant hit to the company's core mainframe business, which saw a 42% drop compared to the same period last year. This decline triggered a chain reaction, as reduced hardware sales directly affected the revenue from high-profit software.

CEO Krishna explained that with the rise of the artificial intelligence boom, data center and computer component costs increased by 15% to 30%, forcing many enterprise customers to delay mainframe purchases. However, the management emphasized that this is just a temporary adjustment, and customers have not abandoned mainframes, with plans to resume purchasing in the future.