Why Kyndryl (KD) Shares Are Plunging Today

What Happened?

Shares of IT infrastructure services provider Kyndryl (NYSE:KD) fell 19.6% in the afternoon session after the company reported first-quarter revenue that fell short of Wall Street's expectations, overshadowing its in-line earnings. The IT services provider posted revenue of $3.74 billion, which missed the consensus estimate of approximately $3.83 billion. This sales disappointment occurred despite the company's adjusted earnings per share of $0.37 meeting analyst targets. The revenue figure also represented a 2.6% decline in constant currency, a metric that removes the effects of foreign exchange fluctuations. The market reaction suggested that investors prioritized the slowdown in sales growth over the company's stable profitability, even though Kyndryl reaffirmed its financial outlook for the fiscal year.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Kyndryl? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Kyndryl’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. But moves this big are rare even for Kyndryl and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 4 days ago when the stock dropped 3.3% on the news that a surprisingly weak U.S. jobs report was released, fueling concerns about a slowing economy. 

The U.S. economy added only 73,000 jobs, falling significantly short of economists' expectations, while figures for May and June were revised down, erasing 258,000 previously reported jobs. The professional and business services industry itself shed 14,000 jobs. This data points to a cooling labor market, fueling concerns of a slowing economy. A weaker economic outlook often leads to reduced corporate spending on key services like IT consulting and professional staffing, which directly impacts the sector's revenue and growth prospects. The report immediately increased investor expectations of an interest rate cut by the Federal Reserve.

Kyndryl is down 17.8% since the beginning of the year, and at $29.20 per share, it is trading 32.8% below its 52-week high of $43.45 from February 2025. Investors who bought $1,000 worth of Kyndryl’s shares at the IPO in October 2021 would now be looking at an investment worth $716.56.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.