IBM beat Wall Street estimates for second-quarter revenue and profit on Wednesday, but lower-than-expected sales in its mainstay software segment overshadowed a renewal in demand for the mainframe business spurred by AI upgrades.

Shares of IBM (NYSE:IBM) dropped more than 5% in premarket trading on Thursday after weaker software sales overshadowed the company’s stronger-than-expected earnings and revenue fueled by ongoing demand for AI technologies.

IBM shares fell on Thursday after the company’s software revenue missed estimates though it recorded strong year-over-year revenue growth and healthy profit margins. IBM stock fell 7% on Thursday as investors reacted to mixed signals in the company’s performance and outlook.