IBM slumped more than 7.5 percent Wednesday, making for the stock's worst day since April 2013, as analysts and investors balked at lower-than-expected adjusted margins.

The tech company announced better-than-expected earnings and revenue Tuesday. But IBM reported margins that, exempting one-time boosts from workforce restructuring and changes to the U.S. tax code, were mostly flat year over year.

The stock closed Wednesday at $148.79. That knocks more than $11 billion off the company's previous market cap of $148.2 billion and puts IBM well into correction territory at more than 13 percent off its 52-week high.

"The bottom-line was helped by a one-time tax gain, so on an apples-to-apples basis, IBM missed the Street's profit margin expectations which will weigh on shares along with guidance," Dan Ives, analyst at GBH Insights, said in a note.

IBM does not change guidance estimates in the middle of the year and so reiterated full-year earnings per share guidance of at least $13.80, falling 3 cents below analyst estimates.

"The quarter/guidance overall we would characterize as a slight disappointment as the margin softness, in-line Strategic Imperatives number, and unchanged guidance for the year was not enough for the bulls on the name and could put some pressure on shares," Ives said.