International Business Machines Corporation (IBM) saw its stock plummet over 10% to open Thursday’s trading session despite a solid Q1 earnings report. IBM’s first-quarter results failed to calm investor anxiety over artificial intelligence’s impact on the infrastructure and software giant. IBM surpassed consensus on the top and bottom lines, with 9% revenue growth. However, its guidance is what has investors concerned.

IBM’s revenue grew 9% year over year in the quarter, according to the earnings report. Net income of $1.22 billion, or $1.28 per share, increased from $1.06 billion, or $1.12 per share, in the fourth quarter of 2024. Adjusted earnings exclude acquisition-related adjustments. Additionally, IBM’s first-quarter software revenue grew 11% to $7.05 billion, higher than the $7.02 billion consensus among analysts polled by StreetAccount.

As of Wednesday’s close, IBM shares had declined about 15% so far in 2026, while the S&P 500 index was up 4% in the same period. IBM maintained its full-year guidance of constant currency revenue growth above 5% versus estimates of more than 5.1%. Wall Street may view that as a cautious outlook, given the company’s recently closed Confluent acquisition, which has sent its stock lower on Thursday.

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Furthermore, IBM is one of several top tech stocks that have fallen victim to the recent tech stock selloff. Investors have been selling off software stocks over fears that AI will disrupt their business models and replace their software products. However, IBM has pushed back against that narrative, arguing that AI will make its offerings more attractive. “As clients scale use cases, AI continues to be a tailwind for our global business,” IBM CEO Arvind Krishna said in the company’s earnings release.

At $228, IBM is trading near the bottom of its 52-week range and below its 200-day simple moving average.