Despite exceeding analyst expectations with a strong quarter fueled by resilient growth and profitability, IBM’s stock price dropped following reports of government contract cancellations linked to cost-cutting initiatives under the Department of Government Efficiency (DOGE). The tech giant reported robust first-quarter sales increasing almost 1% to $14.5 billion and earnings per share of $1.60, while revealing cancellations in contracts worth approximately $100 million. However, IBM’s Chief Financial Officer Jim Kavanaugh downplayed these concerns by stating that federal sales constitute less than 5% of their overall revenue. Despite the unexpected drop, analysts highlight IBM’s diversified business model and strong performance, with first-quarter guidance exceeding projections. The company remains committed to its strategic transformation, leveraging acquisitions in software and AI, which are expected to drive future growth.