Cramer says this report is important because this is the lowest valuation of IBM that he has ever seen in 35 years. He thinks next year is a breakout in which 65% or more of the company would be software, which would cause it to grow at a level that it does not have right now.
Another reason to watch this upcoming earnings report is that Warren Buffett has bought so much stake in the company. People have been criticizing Buffett's moves lately, but if they see IBM go higher, then they will look at his other names.
Cramer calls this a classic "value vs. growth" case. IBM has no growth at the moment and revenue is declining, but the money is still going to the tech company. If IBM delivers a decent quarter and the stock surpasses $200, then this would indicate the recent value rotation has legs.
IBM has challenges in China and has been missing quarterly revenue, but Cramer points out that investors know this and yet the stock continues to climb because people think it will get better. If IBM's earnings bring the price down into the $180 range, then Cramer would buy it at that level. If the rotation continues, however, then the stock won't trade down.
Finally, Cramer suggests watching Microsoft (MSFT) to get a read on how long this rotation will continue. It has not come down this year, but if it starts to slip, then it would provide an indicator for investors.