Jim Cramer: IBM CEO surprised by earnings miss

By Ramish Cheema Sat, July 25, 2026 at 12:54 AM PDT | 3 min read

• IBM +3.65%

International Business Machines Corporation (NYSE: IBM) is another stock that Jim Cramer has continued to support, despite its recent struggles. For more than a year, the CNBC host has repeatedly praised the company for its software and quantum computing businesses.

IBM shares are down 26% year-to-date and closed 25% lower on July 14. Cramer discussed the sharp decline on Tuesday:

"I mean think about what happened with IBM... that's ringing in people's heads. IBM was a bell ringer. Especially because Arvind Krishna is one of the most well liked guys ever. For him to be surprised, really good article in the Journal about when he was surprised. That means, if he can be surprised and I'm gonna be surprised, I don't wanna be surprised."

Q2 Earnings Miss

On July 14, IBM released its preliminary second-quarter earnings, guiding for:

• Revenue: $17.2 billion (below analyst estimates of $17.86 billion)
• Earnings per share: $2.93 (below estimates of $3.01)

CEO Arvind Krishna commented on the results, stating: "We did not adapt and move quickly enough." He noted that businesses had shifted spending toward hardware purchases such as memory chips, server equipment, and storage products. The "surprise" Cramer referenced was the CEO's own admission of being caught off guard.

Analyst Reactions

Following the earnings guidance:

• Citi cut its price target for IBM to $245 from $255, maintaining a Buy rating.
• Argus reduced its price target to $280 from $360, also keeping a Buy rating.

Analysts noted that while they continue to model growth for IBM—driven by revenue, margin expansion, and cash flow—estimates have been adjusted downward following the guidance.

Cramer's Earlier Comments

During his Mad Money appearance on June 4, Cramer discussed IBM's share price volatility:

"Oh, okay… look, I think you raised a really interesting question. You said it was up, down, up, down. This stock is up about 80 points in like a week. I think we gotta give it a chance. I want it to come down before I can give it my seal of approval. And I like it very much, but it's up on a spike, and you know, I don't recommend a parabolic move… It's hardly ever worked."

Hedge Fund Activity

• AQR Capital Management increased its stake in IBM by 121% in Q1, bringing its position to $455 billion.
• Arrowstreet Capital disclosed a new $48.7 million stake in the company.

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