Jim Cramer: Forget Data-Center Darlings, Buy IBM at 22x Earnings

On the July 6, 2026 episode of CNBC's Stop Trading, Jim Cramer redirected investors' attention away from the heavily traded data-center stocks, urging them to consider IBM (IBM) as a "boring" but solid investment opportunity.

Recommendation Change

Cramer did not announce an official rating change but explicitly recommended buying IBM at a price-to-earnings ratio of 22x, arguing that the market is overlooking the company's AI potential.

Analyst's Rationale

Cramer based his recommendation on IBM's attractive valuation (22x earnings) compared to other data-center stocks trading at much higher multiples. He also noted that IBM has a strong presence in AI through its Watson platform but does not receive the same media attention as companies like NVIDIA (NVDA).

Context

Cramer's advice comes at a time when data-center and AI stocks are experiencing high valuations, with investors focusing on companies benefiting from AI infrastructure capital expenditure. In contrast, IBM offers a more conservative valuation with reasonable growth prospects.

What to Make of This

Cramer's recommendation highlights a potential investment opportunity in a traditional company like IBM, which may be undervalued relative to its AI peers. However, investors should conduct their own research before making any investment decisions.