It was a rough Tuesday for IBM (IBM) and pretty much anyone in the tech and IT services neighborhood. The legacy tech giant released preliminary second-quarter results that missed Wall Street's expectations, and the market responded by knocking its stock down nearly 24%.

IBM now expects second-quarter revenue of $17.2 billion, well below the $17.86 billion analysts were looking for. On the earnings side, operating non-GAAP EPS is projected at $2.93, also missing the $3.02 consensus. That's the kind of miss that gets investors' attention — and not in a good way.

What Went Wrong?

CEO Arvind Krishna explained that enterprise customers shifted their capital spending late in the quarter. Instead of buying software or consulting services, they redirected money toward servers, storage, and memory products to lock in supply ahead of expected price increases. That shift hurt IBM's infrastructure revenue, which fell 7% year-over-year. Software revenue managed a 5% gain, and consulting revenue was flat.

Krishna also pointed to rapidly evolving cybersecurity concerns that disrupted customer decision-making. He acknowledged that IBM's teams “did not adapt and move quickly enough” to the changing market conditions. That's a candid admission from a CEO, and it didn't exactly inspire confidence.

The Ripple Effect

IBM's bad news didn't stay contained. The lowered outlook dragged down a whole swath of technology and IT consulting stocks in pre-market trading. Here's how some of the biggest names were moving:

As of publication, IBM shares were trading at $220.63, down 23.98% on the day. The message from the market is clear: when a bellwether like IBM stumbles, it's not just its own problem.