Jim Cramer on International Business Machines: "I Honestly Think That the Stock Remains a Steal Here"

International Business Machines Corporation (NYSE:IBM) is one of the stocks that was recently put under the microscope by Jim Cramer. Cramer called the stock a “steal,” as he commented:

“Long story short, Red Hat came in a little light but… it really is the only key part of IBM that was disappointing. Personally. I think the negative reaction to that specific piece of hair on the quarter was downright ridiculous. Even as I know that the Red Hat division again is loved for its consistent high growth. I loved it… When I look at what IBM’s done these past couple of years, years under Arvind Krishna, I gotta wonder why wouldn’t anyone trust him? I mean, the guy’s totally bankable.

These sellers don’t believe in giving anyone the benefit of the doubt, and it’s costing them money, not you. Plus, there’s so much good news happening all throughout the rest of the organization, I think it’s very shortsighted to focus on an ever-so-slight tick down from Red Hat. That includes IBM’s recent acquisition of HashiCorp, another hybrid cloud infrastructure play, and that’s doing great.

Their consulting business has returned to growth, becoming the glue that holds IBM’s AI narrative together. Even their sleepy infrastructure division is doing great with that new mainframe product that’s on fire. Somehow, this boring business has the fastest growth in the entire company right now. Oh, and let’s not forget, they have the only commercially viable quantum computing business…

So here’s the bottom line in a story that I think is very easy to get your arms around: If you saw IBM stock selling off this morning in response to earnings and freaked out, there’s nothing to be afraid of because the actual numbers were superb. Thankfully, the market eventually came around to my point of view, but IBM is still down versus where it was before the quarter. I honestly think that the stock remains a steal here at just over 23 times next year’s earnings estimates in a very overcrowded, expensive group of tech stocks.”

International Business Machines Corporation (NYSE:IBM) provides integrated technology solutions, software, and consulting services focused on hybrid cloud, AI, and digital transformation.

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Disclosure: None. This article is originally published at Insider Monkey.