We recently published a list of Jim Cramer Latest Lightning Round: Top 10 Stocks to Watch. Since IBM Common Stock (NYSE:IBM) ranks 6th on the list, it deserves a deeper look.
Jim Cramer in a latest program on CNBC talked about the latest rebound in the market.
“Never get tired of all-time highs. We are experiencing a time for the market which is what I said would happen when the Fed starts cutting rates when the economy is still solid.”
Cramer said that the key reason the market roared to highs was strong earnings from top banks. He said since the Fed’s interest rate cuts have just started, investors believe maybe the “best is yet to come.”
Jim Cramer wondered whether this strong performance trend would be a “pattern” in this earnings season.
“We will find out soon enough. We will see if the positive action will be sustained.”
Cramer recommended investors to “listen to the calls” this earning season and “ponder a moment, and only then should you pull the trigger.”
“We are at the beginning of one of the year’s four reporting periods. Probably the most exciting. I can’t believe I still get fired up, but man, am I ever.”
For this article, we watched the latest episodes of Jim Cramer’s ‘Lightning Round’ segment on CNBC and picked 10 stocks he was talking about. With each company, we have mentioned its hedge fund sentiment. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Credit: IBM
IBM Common Stock (NYSE:IBM)
Number of Hedge Fund Investors: 54
A caller recently asked Jim Cramer about IBM Common Stock (NYSE:IBM) in a recent program. Here was Cramer’s response:
“It yields about 3%. Say I wanted to buy 100 shares of IBM over the course of the next year. I would buy 25 and then let it come back down because it’s had pretty much of a parabolic move. But I would be a buyer of this move. I think Arvind Krishna’s (IBM CEO) doing a remarkable job.”
Can IBM Common Stock (NYSE:IBM) become a top AI stock and compete with peers like Oracle, Salesforce and Microsoft?
The company recently released its Telum II Processor and Spyre Accelerator at Hot Chips 2024, designed to boost the next-gen IBM Z mainframe system. Telum II offers 8 cores at 5.5GHz with 36MB L2 cache per core and a 40% increase in total on-chip cache. Spyre adds AI capabilities with 32 compute cores and 1TB memory. Both chips, built by Samsung on a 5nm process, will launch in 2025, supporting IBM’s AI initiatives. IBM Common Stock (NYSE:IBM) also acquired Accelalpha to strengthen its Oracle consulting expertise, further enhancing its cloud and AI capabilities for enterprise clients.
IBM Common Stock (NYSE:IBM)’s latest quarterly results were driven by software, consulting, and infrastructure, boosted by accelerated enterprise AI adoption. Revenue grew 4% year-over-year, and free cash flow rose 24%, reflecting the company’s strong financial health. IBM Common Stock (NYSE:IBM) is well-positioned to capitalize on AI trends with its watsonx AI platform and Granite models, offering secure and transparent solutions that address data privacy concerns, critical for enterprise AI implementation. Their unique blend of consulting, software, and AI solutions supports large-scale AI projects.
Diamond Hill Capital Long-Short Fund stated the following regarding International Business Machines Corporation (NYSE:IBM) in its first quarter 2024 investor letter:
“Among our bottom Q1 contributors short positions in Dick’s Sporting Goods, International Business Machines Corporation (NYSE:IBM) and Palomar Holdings. Though we believe the quality and durability of IBM’s free cash flow-generating capabilities remain questionable, investor sentiment has improved amid optimism for the company’s still-nascent AI product suite.”
Overall, IBM Common Stock (NYSE:IBM) ranks 6th on Insider Monkey’s list titled Jim Cramer Latest Lightning Round: Top 10 Stocks to Watch. While we acknowledge the potential of IBM Common Stock (NYSE:IBM), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than IBM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
