Jim Cramer highlights IBM’s 22x forward P/E and $330 BofA price target amid surging AI revenue and mainframe growth.
Jim Cramer advised investors to pivot from high-valuation data-center AI stocks to IBM, citing its 22x forward P/E ratio compared to peers trading above 40x. Bank of America recently upgraded IBM’s price target to $330, reinforcing the call.
IBM reported $12.5 billion in generative AI bookings and a 51% surge in mainframe revenue for Q1 2026, marking its fourth consecutive EPS beat. However, consulting growth slowed to 4%, raising questions about AI’s impact on legacy services.
Cramer emphasized IBM’s valuation and stability, contrasting it with the crowded data-center trade. The recommendation follows IBM’s consistent performance and BofA’s bullish outlook.