IBM suffered a historic 25% single-session plunge after a pre-announcement revealed a $700 million revenue miss and adjusted EPS of $2.93 versus $3.01, with management warning that customers are redirecting spend toward AI servers, memory, and hardware while delaying software purchases. The sell-off, described by analysts as the worst day on record for Big Blue, rattled markets already on edge from a volatile earnings season.
The episode of DH Unplugged titled "Big Blew Up" dissected the implications, with host Andrew Horowitz noting the disconnect that lifted Dell 7% and Hewlett Packard Enterprise nearly 5% on the same session. Horowitz shared an anecdote from a weekend gathering with commercial real estate developers and plumbers who described stalled projects and frozen loan draws, drawing a parallel to the 2007-2008 letters-of-credit squeeze.
The broader market context includes blowout bank earnings from JPMorgan ($21B net revenue, 86% jump in equities), Bank of America ($9.1B net income), Goldman Sachs ($6.6B profit, $20.98 EPS), and Citigroup (net income up 45%). Meanwhile, SK Hynix's $26.5 billion NASDAQ ADR listing was oversubscribed seven times, and oil pushed toward $80 after President Trump walked back a 20% Strait of Hormuz reimbursement fee.
Horowitz introduced the term "cradling" to describe algorithmic rotation that props up indices even as individual names decline. He pointed to a chart of the S&P 500's best quarters since 1990, noting that April 2020 and the post-March 2009 rebound both followed massive stimulus, and momentum has historically carried into the next quarter.
On the AI front, the episode examined Odysseus: The Fall, a 135-minute feature directed by Ash Kusha and produced by FountainO for mid-five figures, launching alongside Christopher Nolan's $250 million Odyssey starring Matt Damon. The hosts also unpacked Apple's lawsuit against OpenAI over alleged trade-secret theft involving former hardware chief Tang Tan and Chang Liu, with more than 400 ex-Apple employees now at OpenAI. Stock picks included Amazon and Micron, both long.
The episode also covered a cyclosporiasis outbreak across 30 states and SpaceX's dramatic retracement. For engaged retail investors, the full episode is available at DH Unplugged and on Apple Podcasts, Spotify, and Amazon Music.
