Jim Cramer says IBM's 25% plunge isn't enough to make the stock a buy

Jim Cramer said Tuesday that IBM has landed on the wrong side of a major shift in corporate technology spending. "That's the new reality, and I have no idea when it will change, which is why I can't recommend IBM, not even after today's severe decline," the "Mad Money" host said. IBM shares tumbled about 25% after the company preannounced disappointing second-quarter results ahead of next week's scheduled earnings release. Revenue, earnings and software revenue growth all fell short of Wall Street expectations, prompting CEO Arvind Krishna to acknowledge the company "faltered" as several large customer deals failed to close. Cramer said the shortfall is one of the clearest signs yet that companies are reshuffling their information technology budgets as artificial intelligence spending accelerates. He said businesses are increasingly prioritizing three areas of IT spending: cybersecurity, hardware and AI "tokens," or the consumption-based costs associated with using AI models. Other technology projects, he argued, are increasingly being pushed aside. "Unfortunately for IBM, they have too many products and services that fall into the 'other types of spending' categories, even if they also ...