Jim Cramer Defends IBM Amid Recent Decline, Calls it 'Down Too Much'

IBM is down too much, according to Jim Cramer. Despite missing software revenue estimates in Q2, Cramer believes the firm is a leader in quantum computing and has a great software package. He thinks investors are punishing IBM too hard and sees a major opportunity in the stock.

IBM stock has been under pressure recently, with the stock price sliding nearly 20% since the start of July. The pullback comes despite the company's strong performance in the first half of the year, where shares rallied more than 30%. The recent downturn can be attributed to missed software revenue estimates in Q2 and broader concerns about the AI bubble, as highlighted by an MIT report [1].

However, Jim Cramer, a prominent financial analyst, sees a major opportunity in IBM's stock. In his latest comments, Cramer noted that IBM is a leader in quantum computing and has a strong software package. He believes that investors are punishing IBM too harshly and sees a significant opportunity in the stock.

IBM's recent Q2 results showed that the company's closely watched software segment slightly missed Wall Street estimates. The federal government's cutback on spending in the technology consulting sector has also contributed to a rocky year for the company. Despite these challenges, Cramer remains optimistic about IBM's long-term prospects.

Cramer's views align with some analysts who have recently raised their price targets on IBM. For instance, Goldman Sachs Group increased their price target from $270.00 to $310.00 and gave the company a "buy" rating [2]. Similarly, Stifel Nicolaus raised their target price from $290.00 to $310.00 and gave the stock a "buy" rating [2].

While IBM's stock has faced a significant pullback, Cramer's optimism and the recent positive analyst reviews suggest that there may be value in considering IBM as a potential investment. However, investors should conduct thorough due diligence and consider their risk tolerance before making any investment decisions.

References:
[1] https://www.investors.com/news/technology/ibm-stock-gen-ai-mit-report-acn-stock/
[2] https://www.marketbeat.com/instant-alerts/filing-alliance-wealth-advisors-llc-ut-decreases-stock-position-in-international-business-machines-corporation-nyseibm-2025-08-16/