We recently published a list of Jim Cramer Stock Portfolio for Q4: Top 11 Stocks to Buy and Sell. 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 importance of using short-term rallies to your advantage. He said that investors should know when to take the chips off the table.
“The idea that you should buy and hold through both the best of times and worst of times is probably incredibly foolish, with only very few exceptions,” Cramer said.
Cramer said that if the stock you bought is going higher and higher and you keep resisting the urge to take some profits, you won’t make any actual money from these gains if the stock comes down later paring all these profits. This seems straightforward but the idea of buying low and selling high is easier said than done, Cramer said.
“Don’t get carried away by the optimism. Instead, keep your head on straight, check your emotions, focus on long term and think about ringing the register, especially on stocks that might be getting too high,” Cramer added.
For this article we watched several latest programs of Jim Cramer aired on CNBC and picked 10 stocks he’s talking about. We also picked an interesting prediction Cramer made back in 2021 about a stock and saw how it turned out. With each company we have mentioned the number of hedge fund investors. 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
When asked about IBM Common Stock (NYSE:IBM), Jim Cramer said the company is “doing quite well.” Cramer said that he gets “more and more impressed” with IBM.
“Arvind Krishna (IBM CEO) has really re-invented the company, he’s doing a terrific job,” Cramer added.
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’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 Stock Portfolio for Q4: Top 11 Stocks to Buy and Sell. 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.