Name: IBM plunges on preliminary Q2 miss, cites weakness in software, infrastructure businesses
Uploaded: 2026-07-14T13:39:35+00:00
Duration: 534 s

Speakers

Jim Cramer — Host, Mad Money

David Faber — Anchor, Squawk on the Street / Media Analyst

Summary

IBM's preliminary Q2 miss highlights a major shift in enterprise IT spending from legacy software/mainframe to compute and cybersecurity. Jim Cramer argues the shift is permanent, boosting chipmakers like NVIDIA, SK Hynix, and Micron, as well as cybersecurity plays like Cisco. He also comments on software names, favoring ServiceNow and Salesforce over Adobe, and defends Apple and Arm amid negative analyst calls.

IBM prelim Q2 revenue miss driven by weakness in software and infrastructure as clients reallocate to servers, storage, memory.
Jim Cramer sees a fundamental shift to compute spending, benefiting NVIDIA, SK Hynix, and Micron.
SK Hynix multiple highlighted as extremely cheap at roughly 3.8x forward earnings.
Micron's capacity discipline during downturns positions it well for AI demand.
Cybersecurity spending is also a priority, with CrowdStrike and Palo Alto as beneficiaries, and Cisco cited after Splunk acquisition.
Cramer calls Adobe business 'bad' while ServiceNow and Salesforce are described as stronger.
Apple and Arm remain attractive despite analyst downgrades.
Broad tech sell-off partly blamed on ETF flows rather than fundamentals.

Ideas

Jim Cramer Host, Mad Money 2:25

IBM legacy spend shift away permanently.

IBM's preliminary Q2 miss reveals a permanent shift in enterprise spending away from its legacy mainframe and software towards compute and cybersecurity; the orders may not come back, making the 24% stock decline warranted and the stock unattractive.

Jim Cramer Host, Mad Money 2:40

Compute stocks benefit from spending shift.

Enterprise technology spending is undergoing a fundamental shift to buying compute (servers, storage, memory), and the money is moving to NVIDIA, SK Hynix, and Micron rather than legacy mainframe/software, making these chip stocks clear beneficiaries.

Jim Cramer Host, Mad Money 3:19

Salesforce business better than ever.

Marc Benioff says Salesforce's business is better than ever, directly contradicting the bearish thesis that enterprise on-premises shifts are hurting the company; the stock is thus unjustly sold off and remains attractive.

Jim Cramer Host, Mad Money 3:24

Adobe business is bad, avoid.

Adobe's business is bad, making the stock one to avoid in the current environment.

Jim Cramer Host, Mad Money 3:25

ServiceNow business better than ever.

ServiceNow's business is better than ever, and the company will surprise negative analysts who are downbeat on the stock, making it a compelling opportunity despite the software sell-off.

Jim Cramer Host, Mad Money 4:28

Cybersecurity stocks benefit from spending shift.

Cybersecurity spending is top of mind and has frozen other IT budgets; CrowdStrike and Palo Alto have been the big beneficiaries of this trend, and should continue winning even though ETF-driven selling may pressure them short term.

Jim Cramer Host, Mad Money 6:23

Cisco is cybersecurity play, buy.

Cisco is a buy because it has become a cybersecurity beneficiary after acquiring Splunk, which was a great cybersecurity asset, and the stock is relatively cheap.

Jim Cramer Host, Mad Money 7:22

Arm everywhere in hardware, strong case.

Arm has a strong investment case because its technology is in everything and it is a hardware play, making it compelling even after recent negative commentary.

Jim Cramer Host, Mad Money 7:34

Apple remains great opportunity.

Despite an analyst going underweight on Apple, the call is likely wrong; Apple remains a great opportunity and investors who follow that analyst will miss out.

IBM plunges on preliminary Q2 miss, cites weakness in software, infrastructure businesses

Summary

Ideas

Up Next