Jim Cramer's CNBC Investing Club discussed multiple stock moves during its Tuesday Morning Meeting after stocks rose following a cooler-than-expected June consumer inflation report. IBM shares plunged roughly 26% on the session after the company preannounced a weaker quarter due to software business softness, marking its worst day since October 1987. Apple slipped nearly 1% after KeyBanc downgraded the stock to underweight with a $250 price target, while Arm Holdings fell more than 5% following an HSBC downgrade to hold. Cramer dismissed concerns about Apple and emphasized Intel as a buy after the Club recently exited its Arm position to purchase more Intel shares. The session highlighted ongoing shifts in AI-related spending toward infrastructure and manufacturing capacity concerns in the semiconductor sector.
IBM Preannounces Weaker Quarter Due to Software Softness
IBM shares plunged roughly 26% on Tuesday, putting the stock on track for its worst day since October 1987. The company preannounced a weaker quarter due to softness in its software business. IBM attributed the challenges to customers shifting spending toward servers, storage, and memory. Jim Cramer said the warning underscores how AI-related spending continues to migrate toward infrastructure and cybersecurity.
KeyBanc Downgrades Apple to Underweight, Cramer Dismisses Concerns
Apple shares slipped nearly 1% after KeyBanc downgraded the stock to an underweight sell and lowered its price target to $250. The Club stock closed at $317 on Monday. KeyBanc analysts argued that U.S. wireless carriers are scaling back device subsidies, which could slow iPhone upgrade cycles and make Wall Street's growth expectations too optimistic. The firm also warned that recent price increases on Macs and iPads could weigh on unit demand and eventually slow Apple's high-margin services business. Jim Cramer dismissed those concerns, arguing they rely too heavily on assumptions about Apple's business. "That's all conjecture. I don't want conjecture. I want facts," he said. "I like Apple here."
CNBC Investing Club Exits Arm for Intel Amid Foundry Capacity Concerns
Arm Holdings fell more than 5% after HSBC downgraded the stock to hold, citing near-term foundry capacity constraints that could limit earnings growth. Jim Cramer said the report reinforces why the Club recently exited its position in Arm to buy more shares of Intel. While he praised Arm CEO Rene Haas, Cramer noted that Arm depends on third-party foundries to manufacture its chips. By contrast, he noted that Intel is expanding its own manufacturing footprint. "I think Intel's such a buy here," he said. Jim Cramer's Charitable Trust is long AAPL and INTC.
FAQ
Why did Jim Cramer dismiss the Apple downgrade?
Jim Cramer dismissed the KeyBanc downgrade because he argued the analysts' concerns rely too heavily on assumptions about Apple's business rather than facts. He stated "That's all conjecture. I don't want conjecture. I want facts" and said "I like Apple here."
Why did the CNBC Investing Club exit Arm to buy Intel?
The Club exited Arm after HSBC downgraded the stock to hold, citing near-term foundry capacity constraints. Jim Cramer said Arm depends on third-party foundries to manufacture its chips, while Intel is expanding its own manufacturing footprint, making Intel "such a buy here."
What caused IBM shares to plunge 26% on Tuesday?
IBM shares plunged roughly 26% after the company preannounced a weaker quarter due to softness in its software business. IBM attributed the challenges to customers shifting spending toward servers, storage, and memory, reflecting a migration of AI-related spending toward infrastructure.
