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IBM announced strong second quarter 2025 earnings that beat expectations on many points, helped in part by response to its new AI-focused mainframe computer. So why is the stock sliding today? First, a look at the results. IBM Q2 2025 earnings results Shares in the stock (NYSE: IBM) were down over 8% on Thursday in midday trading, after the tech giant beat expectations for “revenue, profit, and free cash flow” this quarter. The company reported revenue of $16.98 billion, topping expectations of $16.59 billion, with earnings-per-share (EPS) of $2.80, beating expectations of $2.64. It also raised its full year forecast. “With our strong first-half performance, we are raising our full-year outlook for free cash flow, which we expect to exceed $13.5 billion,” IBM chief executive Arvind Krishna said in a statement. “IBM remains highly differentiated in the market because of our deep innovation and domain expertise, both crucial in helping clients deploy and scale AI. Our generative AI book of business continues to accelerate and now stands at more than $7.5 billion.” That’s all good news for investors. In fact, IBMs revenue increased nearly 8% year-over-year in the quarter, according to its earnings statement. So why the stock dive? IBM stock price slides as earnings miss on software revenue The answer: software revenue. While revenue from software rose about 10% to $7.39 billion, it fell short of analyst expectations of $7.43 billion, CNBC reported. “You’re seeing the stock pull back, because there’s just not a lot of room to miss,” Dan Morgan, senior portfolio manager at Synovus Trust, told Reuters. “This would be more evidence that software is not growing at the pace that the Street was expecting.” At the time of this writing, the company had a market capitalization of $239.39 billion.
Category:
E-Commerce
China and the European Union have issued a joint call to action on climate change during an otherwise tense bilateral summit in Beijing on Thursday riven with major disagreements over trade and the war in Ukraine. The two economic juggernauts issued a joint statement on climate change, urging more emission cuts and greater use of green technology and affirming their support for the Paris Climate Agreement as well as calling for strong action at the upcoming COP30 climate summit in Brazil. In the fluid and turbulent international situation today, it is crucial that all countries, notably the major economies, maintain policy continuity and stability and step up efforts to address climate change, the joint statement said. Their climate agreement was a silver lining on a stormy day where European leaders demanded a more balanced relationship with China in talks with President Xi Jinping. They highlighted trade in their opening remarks, calling for concrete progress to address Europe’s yawning trade deficit with China. As our cooperation has deepened, so have the imbalances, European Commission President Ursula von der Leyen said. We have reached an inflection point. Rebalancing our bilateral relation is essential. Because to be sustainable, relations need to be mutually beneficial. Little movement expected Expectations were low ahead of the talks, initially supposed to last two days but scaled back to one. They come amid financial uncertainty around the world, wars in the Middle East and Ukraine, and the threat of U.S. tariffs. Neither the EU nor China is likely to budge on key issues. European Council President António Costa called on China to use its influence over Russia to bring an end to the war in Ukraine a long-running plea from European leaders that is likely to fall again on deaf ears. Xi called for deeper cooperation between China and Europe to provide stability in an increasingly complex world. Both sides should set aside differences and seek common ground, he said, a phrase he often uses in relationships like the one with the EU. China is willing to strengthen coordination on climate and make greater contributions to addressing climate change, he said, but he pushed back against EU restrictions on Chinese exports. We hope the EU will keep its trade and investment markets open, refrain from using restrictive economic and trade tools and provide a good business environment for Chinese companies to invest and develop in Europe, he said, according to a readout posted online by state broadcaster CCTV. US tariff threats weigh on EU-China cooperation Besides trade and the Ukraine war, von der Leyen and Costa were expected to raise concerns about Chinese cyberattacks and espionage, its restrictions on the export of rare earth minerals and its human rights record in Tibet, Hong Kong and Xinjiang. The EU, meanwhile, has concerns about a looming trade battle with the United States. Europe is being very careful not to antagonize President Trump even further by looking maybe too close to China, so all of that doesnt make this summit easier, said Fabian Zuleeg, chief economist of the European Policy Center. “It will be very hard to achieve something concrete. China’s stance has hardened on the EU, despite a few olive branches, like the suspension of sanctions on European lawmakers who criticized Beijing’s human rights record in Xinjiang province, where it is accused of a widespread campaign of repression against the Uyghurs. The summit ended with almost no movement on the major issues of trade, electric vehicles, or Russia, said Noah Barkin, an analyst at the Rhodium Group think tank. Rather, frustration from the EU was glaringly obvious after years in which its concerns have been largely ignored by Beijing. He said the Europeans will likely use more “trade defense tools in the months ahead, including a debate over expanding safeguards and new cases under the blocs foreign subsidies regulation. Trade disputes range from rare earths to EVs Like the U.S., the 27-nation EU bloc runs a massive trade deficit with China around 300 billion euros ($350 billion) last year. It relies heavily on China for critical minerals and the magnets made from them for cars and appliances. When China curtailed the export of those products in response to Trump’s tariffs, European automakers cried foul. China agreed during the summit to to start an upgraded export supply mechanism to fast-track exports of critical minerals, von der Leyen said. Details of the arrangement were not immediately made public. Barkin said he doubted the mechanism would be a miracle solution for what may become a go-to coercion tool for Beijing in the years ahead. The EU has imposed tariffs on Chinese electric vehicles to support its carmakers by balancing out Beijing’s heavy auto subsidies. China would like those tariffs revoked. The rapid growth in Chinas market share in Europe has sparked concern that Chinese cars will eventually threaten the EUs ability to produce its own green technology to combat climate change. Business groups and unions also fear that the jobs of 2.5 million auto industry workers could be put in jeopardy, as well those of 10.3 million more people whose employment depends indirectly on EV production. China has launched investigations into European pork and dairy products, and placed tariffs on French cognac and armagnac. It has criticized new EU regulations of medical equipment sales and fears upcoming legislation that could further target Chinese industries, said Alicia García-Herrero, a China analyst at the Bruegel think tank. The EU has leverage because China needs to sell goods to the bloc, García-Herrero said. The EU remains Chinas largest export market, so China has every intention to keep it this way, especially given the pressure coming from the U.S., she said. China bristles at EU sanctions over Russia’s war against Ukraine. The latest package included two Chinese banks that the EU accused of links to Russias war industry. Chinas Commerce Ministry protested the listing and vowed to respond with necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises and financial institutions. The EU looks beyond Beijing and Washington Buffeted between a combative Washington and a hardline Beijing, the EU has more publicly sought new alliances elsewhere, inking a trade pact with Indonesia and drafting trade deals with South America and Mexico. Costa and von der Leyen visited Tokyo the day before their meetings in Beijing, launching an alliance with Japan to boost economic cooperation, defend free trade and counter unfair trade practices. Both Europe and Japan see a world around us where protectionist instincts grow, weaknesses get weaponized, and every dependency exploited,” von der Leyen said. So it is normal that two like-minded partners come together to make each other stronger. Sam McNeil and Ken Moritsugu, Associated Press Mark Carlson contributed to this report.
Category:
E-Commerce
General Motors, the largest automaker in the U.S., announced its second-quarter financial results on July 22. The report was, overall, a gloomy tale of the impact of President Trumps tariffs, which, the company said, cost it more than a billion dollars this past quarter. But while GMs total profits fell by more than a third in Q2, the company did point out one bright spot: a major spike in EV sales, launching it closer to true competition with Tesla. In its investor relations call, GMwhich operates the subsidiary brands Buick, GMC, Chevrolet, and Cadillacsaid its EV sales more than doubled from April to June. Meanwhile, early this month, Tesla reported a 13% decline in vehicle deliveries for its second quarter, one of the largest quarterly declines in the companys history and its second quarterly decline in a row. In its earnings call on July 24, the company reported its revenue was down more than $3 billion year-over-year (though the company also claimed a newer, cheaper version of the Model Y would soon be available). An analysis by the data collection firm Cox Automotive published on July 14 found that while Tesla still solidly holds the title of the U.S. EV markets largest mover, GM has charged past Ford and Hyundai to snag the No. 2 spot. With models like the Chevy Blazer and Chevy Equinox, the automaker is quietly encroaching on Teslas dominant market spot. 2025 Blazer EV [Photo: Chevrolet] A tale of Teslas (declining) dominance Tesla has long outpaced its competitors in the American EV market, but the gulf that once separated the brand from all others has been slowly closing over the past several years. In 2020, Tesla controlled nearly 80% of the U.S. market, based on data from Experian. By 2022, that was down to 65.4%, followed by 55% in 2023. This year, per Cox Automotive, that share continues to decline, hovering around 45% as of July 11. In a press release, Cox Automotive stated, Teslas many issues do not require a full rehashing here: Suffice it to say, the hyper-competitive EV market is providing the troubled automaker no relief. Part of Teslas market share decline can certainly be attributed to the brands laundry list of reputational blows this year, namely concerning CEO Elon Musks ongoing feud with Trump. But as Cox Automotive hints, another factor is broadening competition: Since 2020, Ford, Honda, Hyundai, Kia, Lexus, and other automakers have introduced countless new EV models. GM, in particular, has been dedicating greater resources to its fleet of electric vehicles. The company now sells 12 different EV models across its four brands, which accounted for about 15% of the U.S. EV market in the second quarter of 2025triple the share of both Ford and Hyundai. Of GMs EVs, its top-selling models were the Chevy Equinox and Chevy Blazer, which sold 17,420 units and 6,549 units, respectively. The Equinox has gained significant traction for its relatively low cost, which starts at around $35,000. These numbers are far behind those of Teslas ultra-popular Model Y, which shipped 86,120 units in the second quarter. Still, Chevrolets EV sales alone have shown 130%-plus year-over-year growthsignaling that GM may be on an upward trajectory compared to Teslas current slump. GM CEO Mary Barra reinforced that trajectory on a July 22 earnings call, sharing that profitable EV sales are now the companys North Star. We are growing in EVs because we have a strategic portfolio of vehicles that people love for their design, performance, range, and value, she said. [Photo: Chevrolet] An uncertain path ahead Despite GMs major EV success of late, the new EV market saw an overall year-over-year decline. Stephanie Valdez Streaty, senior analyst at Cox Automotive, said in its press release that the lower sales underscore the markets ongoing challenges, as growth in the auto business ebbs and flows on consumer demand, and are a sign of a more mature EV market. Used EV sales, on the other hand, quietly flourished, surpassing a record-breaking 100,000 units in the second quarter. With availability growing and incentives for new EVs expected to fall, the used EV market maygrow faster in the quarters ahead, Cox Automotive reported. For market analysts, the elephant in the room is Congresss recent approval of new spending legislation that will end tax credits on new or used EVs beginning September 30. In light of this change, several experts have predicted that EV sales are likely to see a spike in the interim, followed by a noticeable decline starting in October. Cox Automotive takes a slightly more conservative stance, predicting that new EV sales will continue to expand in the U.S. compared to last year, but at a much reduced pace. With government-backed incentives set to end in September and economic pressures mounting, the second half of the year will be a critical test of EV demand, Valdez Streaty said. Q3 will likely be a record, followed by a collapse in Q4, as the electric vehicle market adjusts to its new reality.
Category:
E-Commerce
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