After shocking quarter, IBM insists that AI isn’t killing the mainframe

IBM reported earnings that fell well short of Wall Street expectations, with its mainframe business declining 42% during the quarter. This matters because mainframe hardware sales directly generate additional software revenue, so the hardware decline cascades into reduced profits overall. The CEO attributed the decline to customers delaying mainframe purchases to redirect budget toward other expensive hardware facing extreme price increases due to component costs from the AI boom. IBM leadership stated this was a temporary issue and insisted that customers would still buy mainframes eventually, with no evidence of clients abandoning the platform entirely.