International Business Machines Corp. fell the most in a year on Thursday after reporting results that showed strong profit while also suggesting that economic uncertainty and US government cost cuts may dent the company’s business.

We’ve had a handful of contracts, either statement of work, or cancel and on our annualized backlog of over $30 billion in total consulting”

IBM had 15 of its federal contracts canceled due to DOGE-related cuts during the first quarter of 2025, according to reporting from Reuters and Bloomberg. These cuts amount to $100 million in future payments, per Bloomberg. Federal contracts represent between 5% and just under 10% of IBM’s consulting practice.