Big Blue’s Big Day

As tech bellwether IBM readies its earnings report, the traders are split on whether it’s time to buy Big Blue.

On the one hand, there is an almost categorical consensus that the company will hit or beat numbers, Pete Najarian said. Options traders are already looking for a 7% move and the stock is ticking up in the after market on the heels of Intel’s beat. Guidance will be key for IBM, Najarian said, but he thinks the report will affirm what Intel said – that corporate America is still willing to spend. For that, he’s a buyer into earnings.

IBM does 65% of its revenues overseas, Guy Adami noted. While it has huge exposure to the financial services industry, he pointed out that 75% of its revenues come from overseas banks, so a powerful U.S. economic downturn would be blunted for the company so long as it didn’t spread to the financials of other countries. For Adami, the trade is to take profits ahead of earnings in order to take advantage of the pre-release rally, but then to get back in on a dip. The trend is undoubtedly higher, he said.

Jeff Macke took the contrarian view and recommended selling IBM into earnings. Remember that Intel has been down all year, so for that company to come in line was enough to rally the stock. On the flip side, IBM has been phenomenal so far this year, up almost 10% YTD. It is unlikely that IBM will say anything to knock investors’ socks off either, so maybe a “good enough” number won’t be good enough to send shares skyrocketing like people seem to think, Macke said. The number will probably be fine, but he thinks the initial reaction could be to the downside. Wait and buy it when it pulls back, he said.

>Earlier: Tech Earnings Preview with Carter Worth

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Trader disclosure: On Apr. 15, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (YHOO), (INTC), (MSFT); Finerman Owns (GS); Finerman's Firm And Finerman Own (HD); Finerman's Firm Owns (MO), (MSFT), (PM), (SUN), (TSO), (VLO), (YHOO, (UFS); Finerman's Firm Is Short (SPG), (COF); Najarian Owns (AAPL), (AMR), (BIIB), (CSCO), (MSFT), (TSO), (XLF), (YHOO); Najarian Owns (LEH) Puts; Najarian Owns (WLT) Calls; Najarian Owns A Call Spread In (IBM); Najarian Owns A Call Spread In (INTC); Charles Schwab Is A Sponsor Of "Fast Money"