🚨 $IBM Q2 Earnings Recap 🚨 IBM reported its Q2 results following a rare pre-announcement earlier this month. While software and Red Hat held up, a sharp drop in legacy mainframe demand forced management to cut full-year guidance. The Headline Numbers: • Revenue: $17.2B (+1% YoY) vs. $17.86B est. (Miss) • Adj. EPS: $2.93 vs. $3.01 est. (Miss) • FY Guidance: Revenue growth trimmed to 4%–5% (down from >5%) • Free Cash Flow: $4.8B YTD (on track for ~$12B full-year target) Segment Breakdown: • Software: $7.8B (+5% YoY) | Red Hat revenue up +11% • Consulting: $5.3B (Flat YoY) • Infrastructure: $3.8B (-7% YoY) | IBM Z mainframe revenue collapsed -42% as clients prioritized direct AI hardware purchases The Key Takeaway: Enterprise IT budgets are undergoing a massive "CapEx reprioritization". Corporate spending is shifting away from traditional IT consulting and legacy mainframe cycles directly into hyperscale cloud capacity and raw AI server/storage hardware. As enterprise IT dollars get redirected toward the physical AI stack, a clear group of infrastructure and cloud leaders stand to capture this redirected spending: Beneficiaries: • $NVDA (Enterprise AI acceleration) • $DELL (AI server & storage hardware) • $AMZN (AWS enterprise cloud migration) • $MSFT (Azure enterprise AI workloads)