IBM (IBM) Crashes 22% While Apple (AAPL) Faces Downgrade: Tuesday's Market Action

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IBM stock crashed 22% following disappointing second-quarter revenue and profit figures
KeyBanc downgraded Apple to Underweight on concerns about weakening device demand
Tower Semiconductor jumped 18% after unveiling a $3 billion Japanese manufacturing expansion
JPMorgan dipped even after surpassing Q2 forecasts; BofA and Wells Fargo posted gains
Semiconductor names AMD, Intel, and Micron recovered following Monday’s sharp decline

Tuesday’s premarket session delivered significant activity for market participants. Major banking institutions released quarterly earnings just ahead of the June consumer inflation data, creating a packed agenda for traders before stocks began regular trading.

JPMorgan declined 1.4% in early trading despite reporting second-quarter figures that exceeded Wall Street forecasts. Bank of America advanced 1.9% while Wells Fargo rose 1.4%, with both financial giants topping analyst projections. Citigroup and Goldman Sachs were scheduled to unveil their quarterly performance later in the session.

IBM emerged as the morning’s most significant decliner. The stock plummeted 22% following the technology company’s release of preliminary second-quarter numbers that fell short on both top and bottom lines. The firm reported $17.2 billion in revenue alongside operating earnings per share of $2.93, figures that lagged analyst consensus.

International Business Machines Corporation, IBM

Chief Executive Arvind Krishna characterized the period as “disappointing.” He attributed the underperformance to postponed closings of major contracts, reduced appetite for the company’s mainframe offerings, and customers reallocating budgets toward server and storage solutions. The infrastructure segment saw revenue decline 7%, while consulting operations remained stagnant.

Despite the shortfall, IBM highlighted that its Red Hat division achieved 11% revenue expansion. Management expressed continued confidence in the company’s strategic direction ahead of comprehensive earnings disclosure scheduled for later this month.

Tower Semiconductor Soars on Japanese Manufacturing Push

Tower Semiconductor emerged as the session’s top performer, surging 18%. The semiconductor manufacturer revealed plans for approximately $3 billion in investment to broaden chip production capabilities in Japan, supported by roughly $1 billion in subsidies from the Japanese government.

Tower upgraded its 2028 financial outlook, forecasting $3.6 billion in revenue alongside $1.2 billion in net earnings. The strategic expansion targets growing requirements from artificial intelligence and data center clients.

Additional chip manufacturers also trended upward. Advanced Micro Devices climbed 2%, Intel increased 2.5%, Micron advanced 3.4%, and Nvidia ticked up 0.4%. The semiconductor sector experienced selling pressure during Monday’s session, with Tuesday delivering a modest bounce.

Apple retreated 1.3% after KeyBanc analyst Brandon Nispel lowered his rating on the stock from Sector Weight to Underweight, establishing a $250 price objective. The research firm pointed to decelerating iPhone, MacBook, and iPad demand, cautioning that diminishing carrier subsidies could extend replacement cycles. KeyBanc added that Apple’s current valuation multiples appear difficult to support at present price levels.

Ericsson tumbled 9% even after exceeding profit expectations. Revenue contracted 6% on an annual basis to SEK 52.7 billion, underperforming estimates primarily due to reduced patent-licensing revenue. The telecommunications equipment provider also disclosed that CEO Börje Ekholm will step down on September 30, 2026, with Per Narvinger designated as his successor.

Penguin Solutions dropped 5% after disclosing intentions to issue $650 million in convertible debt securities. MBX Biosciences declined 6% following a management transition, with Steve Hoerter appointed as incoming chief executive.

BP gained 1.5% after indicating expectations for enhanced oil trading performance as geopolitical instability in the Middle East influences crude pricing dynamics.

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