Shares of technology and consulting giant IBM (NYSE:IBM) fell 6% in the morning session as consulting stocks fell after Defense Secretary Pete Hegseth announced that the government would cancel some consulting contracts.
Also, another consulting firm, Accenture, reported its Q4 2024 (fiscal Q2 2025) financial results and raised concerns about weaker sales in the fed vertical. Accenture CEO Julie Spellman Sweet noted that the new administration is focused on improving government efficiency, leading to a slowdown in procurement processes and negatively impacting sales.
The shares closed the day at $243.34, down 3.5% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy IBM? Access our full analysis report here, it’s free.
IBM’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
IBM is up 10.6% since the beginning of the year, and at $243.32 per share, it is trading close to its 52-week high of $264.74 from February 2025. Investors who bought $1,000 worth of IBM’s shares 5 years ago would now be looking at an investment worth $2,551.
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