Could You Wait Years For IBM Stock To Recover?
A market shock could mean a deep drop and a long wait for a new high. The real question is how much exposure you can afford to have.
International Business Machines (IBM) stock fell 5.1% on June 18th, 2026, a sharp move for the IT consulting and services giant. The drop follows a period where the market is weighing the company’s strong first-quarter results against management’s decision to maintain its full-year guidance. On its latest call, the company reported that revenue grew 6% and its key Software segment grew 8%, reinforcing its strategy as a software-led hybrid cloud and AI platform company.
That recent dip, however, is just a preview. The urgent question for any shareholder is what happens in a true market-wide shock. How far does this stock fall when everything is falling, and more importantly, can you afford to ride out the recovery?
How Deep International Business Machines’s Drawdowns Really Get
Across the 15 major market shocks it has traded through, International Business Machines stock fell an average of 16% from peak to trough, roughly in line with the S&P 500. But averages can hide the real pain. Its single deepest drawdown was a 37% plunge during the market crash of early 2020.
The stock has historically been hit hardest during shocks categorized as a “Growth & Demand Scare.” Those are not abstract events; they were real, memorable periods of intense market fear, including the 2015-2016 major currency devaluation event / Global Growth Scare, the Q4 2018 Fed Policy Error / Growth Scare, and that same market crash of early 2020. In those environments, the stock fell 30% on average.
After the Fall: How International Business Machines Has Come Back
Surviving the fall is one thing; waiting for the recovery is another. Of the shocks it has fully recovered from, the stock took a median of about 5 months to climb back to its pre-shock high. That’s a long time to be underwater. And sometimes, the wait is much longer.
The slowest full recovery was a stark outlier: after the 2013 period of market volatility related to monetary policy changes, it took about 108 months for the stock to reclaim its prior high. While past performance is never a guarantee, that history is a clear reminder that a quick bounce-back is not a given.
Every Major Shock International Business Machines Has Traded Through
Peak-to-trough drawdown in each shock, and how long the stock took to reclaim its pre-shock high. Stock vs. the S&P 500, long-duration bonds, and its sector.
| Shock Event | Stock | S&P 500 | Bonds | Sector | Recovery |
|---|---|---|---|---|---|
| Summer 2007 Credit Crunch | -0.6% | -8.6% | No decline | -7.5% | ~1 mo |
| 2008-2009 Global Financial Crisis | -35% | -53% | No decline | -51% | ~15 mo |
| 2010 Eurozone Sovereign Debt Crisis / Flash Crash | -6.3% | -15% | No decline | -15% | ~4 mo |
| 2011 US Debt Ceiling Crisis & European Contagion | -15% | -18% | -1.1% | -16% | ~3 mo |
| 2013 Taper Tantrum | -13% | -0.2% | -17% | -0.8% | ~108 mo |
| 2014-2016 Oil Price Collapse | -36% | -6.8% | -5.0% | -7.2% | ~29 mo |
| 2015-2016 China Devaluation / Global Growth Scare | -23% | -12% | -4.4% | -12% | ~9 mo |
| 2016-2017 Trump Reflation Bond Selloff | -5.5% | -3.7% | -15% | -3.8% | ~51 mo |
| Q4 2018 Fed Policy Error / Growth Scare | -29% | -19% | -2.2% | -24% | ~9 mo |
| 2020 COVID-19 Crash | -37% | -34% | -0.7% | -31% | ~14 mo |
| 2022 Inflation Shock & Fed Tightening | -10% | -24% | -35% | -33% | ~5 mo |
| 2023 SVB Regional Banking Crisis | -11% | -6.7% | -4.3% | -5.1% | ~4 mo |
| Summer-Fall 2023 Five Percent Yield Shock | -1.7% | -9.5% | -17% | -10% | ~2 mo |
| 2024 Yen Carry Trade Unwind | No decline | -7.8% | -1.2% | -17% | – |
| 2025 US Tariff Shock | -16% | -19% | -3.8% | -26% | ~3 mo |
[1] Summer 2007 Credit Crunch: Subprime hedge fund failures froze interbank lending, prompting an emergency Fed rate cut.
[2] 2008-2009 Global Financial Crisis: Lehman’s collapse froze global credit, crashing every asset class and spiking unemployment.
[3] 2010 Eurozone Sovereign Debt Crisis / Flash Crash: Greece’s deficit revelation collapsed European banks and triggered the May Flash Crash.
[4] 2011 US Debt Ceiling Crisis & European Contagion: US credit downgrade and European sovereign stress triggered a broad risk-off selloff.
[5] 2013 Taper Tantrum: Bernanke’s taper hint spiked Treasury yields, triggering emerging market capital flight.
[6] 2014-2016 Oil Price Collapse: OPEC refused to cut output, crashing crude from $100 to $26.
[7] 2015-2016 China Devaluation / Global Growth Scare: Yuan devaluation sparked global recession fears, crushing cyclicals and emerging markets.
[8] 2016-2017 Trump Reflation Bond Selloff: Trump’s election spurred fiscal stimulus hopes, rotating capital from bonds into cyclicals.
[9] Q4 2018 Fed Policy Error / Growth Scare: Powell’s hawkish comments and trade war fears triggered the worst December since 1931.
[10] 2020 COVID-19 Crash: Pandemic lockdowns caused history’s fastest bear market before massive stimulus drove recovery.
[11] 2022 Inflation Shock & Fed Tightening: 9.1% CPI forced aggressive rate hikes, crushing both stocks and bonds simultaneously.
[12] 2023 SVB Regional Banking Crisis: SVB’s rate-driven bond losses triggered a social-media bank run, seized by FDIC.
[13] Summer-Fall 2023 Five Percent Yield Shock: Strong economic data pushed 10-year yields to 5%, compressing yield-sensitive sector valuations.
[14] 2024 Yen Carry Trade Unwind: BOJ rate hike unwound yen carry trades, briefly crashing tech stocks globally.
[15] 2025 US Tariff Shock: 145% China tariffs crashed equities and the dollar on supply chain disruption fears.
Is This International Business Machines Tougher Than Before?
Of course, the IBM of 2013 is not the IBM of today. The business has been reshaped, with a heavier focus on software and AI. On the latest earnings call, management raised its full-year outlook for the Software business, now expecting it to grow “10-plus percent this year.” The company’s operating margin over the trailing twelve months is 18.8%, a three-year peak. This suggests a more resilient financial model than in the past.
However, risks remain. The large Consulting segment grew just 1% in the first quarter, acting as a drag on overall growth. And management’s choice to maintain full-year guidance despite the strong start has led some to question if a slowdown is anticipated. The historical drawdown pattern remains a relevant benchmark for risk, even for this stronger version of the company.
Sizing Up Your International Business Machines Risk
So, can you ride it out? A 37% drawdown, matching the stock’s deepest on record, is a serious test. On a position sized at 10% of a portfolio, that kind of drop would have cut about 4% from your entire portfolio’s value. At a 20% position weight, it would have erased about 7%.
This is why the most important lever you control is not predicting the next shock, but managing your exposure. Disciplined position sizing and genuine diversification are the tools that determine whether you can withstand the inevitable market downturns. Watching for an acceleration in the Consulting business would be a key sign of improving health.
That discipline is exactly what the Trefis High Quality (HQ) Portfolio is built to deliver: it pairs the upside of strong businesses with the stability of a 30-stock portfolio, sized and rebalanced with discipline, and has a track record of outpacing a benchmark that combines all major indices – the S&P 500, S&P Mid-cap, and Russell 2000. Pairing a concentrated holding with an approach like this is how you keep compounding without a single drawdown derailing the plan.