ServiceNow shares are down due to IBM's disappointing preliminary Q2 results, highlighting the sensitivity of NOW's stock to IBM's performance given their expanded partnership. IBM's revenue and EPS missed estimates, primarily due to weakness in its Z mainframe business and delayed large deals.
ServiceNow (NOW) shares are experiencing a significant drop, not due to its own performance, but in 'sympathy' with IBM's disappointing preliminary Q2 results. This highlights the market's perception of a strong linkage between the two companies, especially after their recently expanded partnership to modernize enterprise systems. IBM's revenue and EPS missed consensus estimates, driven by weakness in its Z mainframe business and delayed large deals, which CEO Arvind Krishna called 'disappointing.' For traders, this indicates that NOW's short-term performance can be significantly influenced by its key partners' financial health, even if its own fundamentals remain strong. The long-term implications depend on whether this is a temporary blip for IBM or indicative of broader issues that could impact their joint ventures.