NEW YORK, Feb 4, 2026, 19:30 EST — After-hours
Shares of International Business Machines Corp (IBM.N) fell 1.8% on Wednesday, closing at $289.05 and dragging the stock down roughly 8% from Monday’s close. The price slipped to an intraday low around $279 before narrowing the decline.
The pullback is significant because the market’s current focus isn’t on IBM’s recent quarter. Instead, the question is how enterprise software and IT services will fare as large language models—AI systems that produce text, code, and answers—begin encroaching on the tools businesses rely on.
IBM got caught up in a broad selloff in global software stocks, which traders link to a fresh legal tool from Anthropic’s Claude model and fears AI could undercut pricing power in “application layer” software. “The selloff … is a manifestation of an awakening to the disruptive power of AI,” said James St. Aubin, chief investment officer at Ocean Park Asset Management. Reuters
IBM investors have another concern: deal risk. Confluent (CFLT.O), the company IBM has agreed to acquire, revealed in a Feb. 4 filing that it has received 17 shareholder demand letters and is facing two lawsuits. The suits claim the merger proxy statement left out or misstated key information—charges Confluent denies. The company said it plans to issue supplemental disclosures aimed at addressing the claims, stopping short of admitting any wrongdoing.
Confluent’s final proxy statement sets the virtual shareholder vote for Feb. 12 at 9:00 a.m. Pacific time. Investors stand to receive $31.00 per share in cash if the deal closes.
IBM has been pushing to keep its AI narrative front and center. On Wednesday, the company announced a global request for proposals—an RFP invites external groups to pitch project ideas—for its IBM Impact Accelerator cohort, which targets AI solutions in education and workforce development. Proposals are due by March 25. “Education and workforce systems are under pressure to adapt faster than ever,” said Justina Nixon-Saintil, IBM’s vice president and chief impact officer. IBM Newsroom
Last week, IBM topped Wall Street forecasts for Q4 revenue and profit, revealing its “AI book of business” — a pipeline of AI-related deals — has climbed to $12.5 billion. CFO Jim Kavanaugh flagged that disruptions linked to government contracts can hit the numbers fast, noting earlier shutdowns weighed on Red Hat’s growth. The federal government makes up about 15% of IBM’s hybrid cloud bookings. Reuters
IBM announced a quarterly cash dividend of $1.68 per share, set for payment on March 10 to shareholders recorded by Feb. 10, the company stated in its quarterly results release.
But the tape might keep setting the pace. If investors continue to see AI as a short-term threat to software margins instead of a demand driver, IBM could remain caught in the sector’s downturn, despite offering AI and cloud products itself.
Coming up, Confluent shareholders will vote on the deal on Feb. 12. Just before that, IBM’s dividend record date falls on Feb. 10.
