Jim Cramer had some thoughts about Real Money stock of the day, IBM.
The company posted earnings after the bell Tuesday.
IBM released earnings that came in at $4.71 per share, 2 cents ahead of the Street consensus forecast. Group revenues, IBM said, were largely flat to last year at $21.78 billion, but that figure topped analysts' estimates of a $21.64 billion tally.
"With our high-value mix and focus on productivity, we expanded our gross margin and we had strong free cash flow generation," IBM CFO James Kavanaugh told investors on a conference call late Tuesday. "With this trajectory, in 2020, we expect to grow revenue, operating earnings per share and free cash flow, and expand operating gross margin."
Cramer broke down IBM during TheStreet Live Wednesday morning.
"Well, and IBM's complicated cause there were two things. Red Hat is really good but it's not that big. But the mainframe cycle was shocking in its strength. Now maybe it shouldn't because mainframes are really important. Go buy Broadcom by the way. They have big leverage off of the mainframe cycle. But the fact that when that cycle kicks in, it doesn't kick in for one quarter, it kicks in for many quarters, maybe the whole year. So IBM is now okay to buy," said Cramer.
Catch up on the Latest News, Features & Webinars on TheStreet!
- Apple Reports Earnings Next Week: Here’s How to Tell if Apple Will Meet Expectations
- Latest From Jim Cramer: Jim Cramer: 3 Things That Made Netflix's Quarter Great
- TheStreet Explains: How Does Shorting a Stock Work?
- Retirement Daily: Add This Often-Forgotten Task to Your 2020 Financial To-Do List
- Sports Biz: Exploring the Math Behind Super Bowl Squares Pools
- Free Webinar: Expert Advice on Equity Trading by CME Group