IBM’s (IBM) pre-announcement of weak results took options traders off guard. They held 8,580 contracts for a $300 strike price. What happened?
IBM warned that revenue would reach $17.2 billion, badly missing Wall Street’s expectations. IBM stock fell by 25.21% to close at $217.07 on Tuesday. CEO Arvind Krishna said that customers chose to buy AI-related hardware, such as storage, memory, and servers. As a result, they bought less of IBM’s software and consulting offerings.
Software firms like ServiceNow (NOW), Microsoft (MSFT), and HubSpot (HUBS) fell.
In the hyperscaler segment, Nebius Group (NBIS) lost 7.8% to close at $194.09. That happened even though Bloomberg reported that it would sell more than $1 billion in AI computing capacity to Reflection AI. The deal will run through 2029. It includes access to NVIDIA’s (NVDA) GB300 AI processors.
Markets continue to price in Meta Platforms (META) potentially entering the neocloud market. By renting out its AI server compute power, albeit older technology, it increases supply and might hurt pricing.
Biogen (BIIB) fell by 8.17% to close at $191.95. The firm posted mid-stage trial data for its Alzheimer’s drug. In partnership with Ionis Pharmaceuticals (IONS), the Phase 2 topline data did not reach its primary endpoint. Still, the study will advance to Phase 3 development.
Biogen’s peers include Vertex Pharmaceuticals (VRTX), Regeneron (REGN), and Gilead Sciences (GILD).
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