Infosys, Wipro ADRs slide as IBM weakness in software and infrastructure business rattles investors

Infosys, Wipro ADRs slide as IBM weakness in software and infrastructure business rattles investors


The American Depositary Receipts (ADRs) of Infosys Ltd and Wipro Ltd dropped on Tuesday (July 14) after International Business Machines (IBM) shares dropped to their lowest levels in nearly six decades, after weaker-than-expected earnings.

Infosys Ltd’s American Depositary Receipt listed on the New York Stock Exchange (NYSE) was trading at $11.10, down 3.39% or $0.39, while Wipro Ltd’s ADR was quoted at $1.85, lower by 2.63% or $0.050 during the day.

IBM shares slid by the most in almost six decades after the tech major reported preliminary second-quarter sales that fell short of expectations, attributing the miss to customers shifting their spending to chips and servers amid AI-fueled shortages.

ALSO READ | IBM shares plunge 23% after weak quarterly results miss Wall Street estimates

IBM’s Q2 revenue totalled $17.2 billion, the company said in a statement on Tuesday, below analysts’ estimates of $17.9 billion. Sales from IBM’s infrastructure division were especially hard hit, dropping 7%. The company said it’s still reviewing its books and final results, set to be posted next week, may be slightly different.

Further, shares of software and IT services companies plunged after International Business Machines. Software peers were dragged lower as Microsoft Corp. fell 3%, Workday Inc. dropped 10%, Oracle Corp. fell 2.1%, Salesforce Inc. shed 6.2%, and Autodesk Inc. slid 5%. The iShares Expanded Tech-Software Sector ETF, a proxy for the software sector, slumped 4.5%.

Shares of IT services companies also tumbled, with Accenture PLC dropping 7.9%, Cognizant Technology Solutions Corp. declining 7%, and Infosys Ltd falling 7.2%.

ALSO READ | IBM unveils tech for chip smaller than 1 nanometer in AI computing push



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