Revenues from new mainframes are typically higher earlier in the cycle as customers upgrade quickly, although the company expects that sales will cool down a bit over Q3. For instance, gross margins for the consulting business contracted by 340 basis points versus last year in Q2, due to a tight labor market. While IBM stock has fared better than the broader market rising by about 3% year-to-date, the economic outlook looks increasingly uncertain, with the Fed raising rates amid surging inflation.