A lot of things weren’t on my bingo card coming into this week. 

I didn’t expect a billionaire tech founder to show me a lot of vintage supercars they just purchased. That was fun, I love cars. 

Speaking of cars, I also didn’t expect a $900 bill for a one-hour service on my new car. But hey, at least the dealership took a video of my car being worked on, sent it to me, and said they thought the car was beautiful. That makes shelling out $900 for some oil, wiper blades, a cabin filter, and expertly inflated tires a little more palatable. 

From a market standpoint, I didn’t anticipate further beatings in red-hot memory chip names like Micron (MU), Sandisk (SNDK), and IBM (IBM). All three could now be considered crashed-out tech stocks. But only one is dead money, given my many chats with experts.

That is IBM. 

IBM announced preliminary second quarter results with revenue of $17.2 billion, missing analyst estimates of $17.85 billion. Non-GAAP earnings are expected to be $2.93 compared to estimates of $3.02.

Big Blue’s stock crashed 25% on Tuesday, its worst day ever since 1961. The stock lost 23% in a single session in October 1987.

The stock treaded water into the weekend, which I think says a lot about how IBM is going to be viewed here. 

“I think that this is one that you’re going to have to wait, and it’s going to be in the penalty box for a while as they adjust their business,” Globalt Investments senior portfolio manager Thomas Martin said on Yahoo Finance’s Opening Bid.

IBM’s stay in the penalty box is well-deserved. To get out, the company will have to stack several comeback quarters to regain investor trust.

I would argue the vibe is different with Micron and Sandisk, both of which are down double-digit percentages from their recent highs. I fancy these violent pullbacks reflect worries about a Fed rate hike more than problems in AI land. Taiwan Semiconductor (TSM) and ASML (ASML) each had great things to say this week on the AI topic, with TSMC announcing another guidance raise. 

Micron and Sandisk remain multiyear growth stories — unlike IBM — and really don’t warrant an extended stay in the penalty box.

“I think you’re seeing basically maybe a little bit of a rotation there,” Yorkville Ives & Co. partner Dan Ives said on Opening Bid.

Brian Sozzi is Yahoo Finance’s Executive Editor, host of the Power Players with Brian Sozzi podcast, and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

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