IBM Plummets 2.73 as Volume Surge Propels It to 68th in Market Activity

On July 31, 2025, IBM (IBM) closed at $252.01, down 2.73% from the previous day’s close, with a trading volume of $1.72 billion, marking a 77.81% increase in activity compared to the prior day. The stock ranked 68th in trading volume across the market. Despite the sharp decline, Bank of America reiterated a “Buy” rating for IBM, setting a $310 price target, citing momentum in AI and software initiatives. The firm highlighted IBM’s strategic shift toward higher-margin offerings as a catalyst for growth.

IBM’s recent earnings report, released earlier in the week, showed mixed results. While revenue for Q2 2025 exceeded expectations, analysts noted underperformance in cloud and AI segments. The company’s focus on AI-driven solutions remains a key theme, but challenges in scaling infrastructure and managing costs have raised concerns. Meanwhile, IBM’s latest cybersecurity report underscored growing risks from “shadow AI” adoption, with 13% of organizations reporting breaches of AI models or applications. The report emphasized inadequate access controls as a critical vulnerability, a factor that could weigh on IBM’s security services demand.

A backtested trading strategy of purchasing the top 500 stocks by daily trading volume and holding for one day generated a 166.71% return from 2022 to the present, significantly outperforming the S&P 500’s 29.18% benchmark. The strategy’s success was attributed to liquidity-driven momentum, with high-volume stocks like IBM benefiting from short-term inflows. However, the approach’s reliance on market structure and liquidity concentration highlights its sensitivity to shifting market dynamics, which may impact future performance.