Why Jim Cramer Is Telling Retail Investors to Stay Far Away from the IBM Stock Dip

International Business Machines Corporation (IBM) registered its worst day on July 14, as the stock dropped 25.2% intraday after the company reported disappointing preliminary second-quarter results. This was the result of customers redirecting spending towards chips and servers, as AI-driven shortages are affecting IT budgets.

CNBC’s Jim Cramer is not keen on the idea of capitalizing on IBM’s dip. According to Cramer, the company is on the wrong side of the shift in enterprise tech spending, as budgets are prioritizing AI, and the company’s Q2 revenue miss lends credence to that concern. Corporate IT spending is now centered on three key areas, which Cramer identified as cybersecurity, hardware, and AI “tokens.”