Jim Cramer is sticking to his wait-a-quarter rule on International Business Machines Corporation after the company missed its quarter, saying he likes IBM but rules are rules. IBM reported uneven second-quarter results, with total revenue up just 1% to approximately $17.2 billion, IBM Z revenue falling 42% and Transaction Processing revenue declining 8%, while operating, non-GAAP EPS rose 5% to $2.93. Software revenue increased 5% to approximately $7.8 billion, including 11% growth at Red Hat and 19% growth in Data, and Distributed Infrastructure revenue rose 37% with Power and Storage building an order backlog of nearly $500 million. CEO Arvind Krishna said in a July 14 shareholder letter that customers redirected spending toward servers, storage, and memory ahead of anticipated price increases, and that IBM did not respond quickly enough as numerous large deals failed to close when expected. IBM produced approximately $4.8 billion in free cash flow during the first half and maintained its expectation that full-year free cash flow would increase by about $1 billion from 2025, while management's updated full-year outlook called for constant-currency revenue growth of 4% to 5%.
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NVIDIA CorporationInternational Business MachinesIBM missed its quarter with revenue up just 1%, IBM Z down 42%, and large deals failing to close, prompting Cramer's wait-a-quarter rule.
Red Hat software revenue grew 11% within IBM's otherwise uneven quarter.
