Why Is IBM Stock Falling Friday?

International Business Machines Corp. (NYSE:IBM) stock traded lower on Friday as investors reacted to another analyst price forecast cut, a broader technology sell-off and continued fallout from the stock’s historic plunge earlier this week.

Analyst Price Forecast Cuts Add Pressure

Investor sentiment weakened further after JP Morgan maintained its Overweight rating on IBM but lowered its price forecast to $250 on Friday. The latest revision follows a series of analyst updates after IBM’s disappointing preliminary earnings release earlier this week.

On Tuesday, Bank of America analyst Wamsi Mohan lowered his price forecast to $280 from $330 while maintaining a Buy rating, saying he was “surprised by the magnitude of the topline miss.” HSBC, meanwhile, downgraded the stock to Reduce from Hold and cut its price forecast to $191.

Weak Preliminary Results Weigh On Sentiment

IBM stock plunged more than 25% on Tuesday after the company issued a preliminary update for its second-quarter results.

The company reported preliminary revenue of $17.2 billion, missing Wall Street estimates of $17.9 billion. Preliminary earnings came in at $2.93 per share, below the consensus estimate of $3.02 per share.

IBM attributed the shortfall to a reprioritization of client capital spending towards memory late in the quarter, alongside execution issues, large deal slippage and cybersecurity concerns at customers.

IBM is scheduled to report second-quarter earnings on July 22.

Technical Picture Remains Weak

IBM remains in a long-term downtrend. The stock is trading about 21% below its 20-day, 50-day and 200-day simple moving averages, indicating selling pressure remains intact.

Momentum indicators also remain bearish. The MACD is below its signal line, while the histogram remains negative, suggesting downside momentum has not eased.

A death cross, formed when the 50-day moving average fell below the 200-day moving average in March, continues to reinforce the longer-term bearish trend.

The next key resistance level is near $236.

IBM Stock Price Activity: IBM shares were down 3.52% at $211.34 at the time of publication on Friday, according to Benzinga Pro data.

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