Daijiworld Media Network – New York

New York, Jul 15: American technology giant IBM witnessed a sharp sell-off on Tuesday after lowering its revenue outlook and acknowledging that it had been slow to adapt to rapidly changing customer spending patterns driven by artificial intelligence (AI).

The decline wiped out an estimated USD 67-70 billion in the company's market value in a single trading session, marking one of the biggest falls in IBM's history.

The sell-off also weighed on the American Depositary Receipts (ADRs) of Indian IT firms. Infosys' ADR fell nearly 8 per cent to USD 11.50, while Wipro's ADR declined more than 4 per cent to USD 1.90 during trading on US exchanges.

An American Depositary Receipt (ADR) is a financial instrument issued by US banks that enables investors to buy and sell shares of foreign companies on American stock exchanges such as the New York Stock Exchange (NYSE) and Nasdaq.

IBM's weak performance followed a downward revision in its revenue outlook. The company reported revenue of USD 17.2 billion for the quarter ended June, reflecting a modest one per cent year-on-year increase.

Chief Executive Officer Arvind Krishna admitted the company had failed to respond quickly enough to changing market dynamics.

"We faltered... and did not adapt and move quickly enough," Krishna said in a message to investors.

He explained that businesses have increasingly shifted spending towards cybersecurity as AI-powered cyber threats become more sophisticated, leading many customers to postpone software purchases and other technology investments.

IBM has also previously indicated that the growing adoption of AI has affected around 8,000 jobs within the company as it continues to reshape its operations.