4. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 60
International Business Machines Corporation (NYSE:IBM) is a multinational technology company offering a wide range of products and services, including hardware, software, cloud computing, and consulting. IBM operates in over 175 countries and is recognized as one of the 30 companies in the Dow Jones Industrial Average. The company has a significant presence in the technology industry, managing 90% of all credit card transactions globally and overseeing 50% of all wireless connections worldwide. IBM’s business segments include Software, Consulting, Infrastructure, and Financing, providing comprehensive solutions to various industries.
International Business Machines Corporation (NYSE:IBM) has positioned itself as a leader in hybrid cloud and AI, with 93% of Fortune 500 companies leveraging their capabilities. The company has built a significant AI book of business worth $5 billion in just 6 quarters, with 80% in Consulting and 20% in Software. IBM closed 2024 with $63 billion in revenue and $12.7 billion in free cash flow, demonstrating strong financial performance. The company’s growth strategy is built on multiple pillars, including a software-led portfolio approaching 45% of revenue, strategic partnerships, and continued innovation in hybrid cloud and AI.
Looking forward, International Business Machines Corporation (NYSE:IBM) has provided guidance for revenue growth inflecting up to 5-plus percent, with continued operating leverage and adjusted EBITDA growing double digits in 2025. The company’s software business is expected to grow at approximately 10%, driven by Red Hat’s acceleration to mid-teens growth, new mainframe cycle, and disciplined capital allocation M&A engine. IBM maintains a strong commitment to innovation with increased R&D spending to 12% from 9% of revenues, while also focusing on productivity improvements that have generated $3.5 billion in savings. The company’s strategic positioning in emerging technologies is evident through its quantum computing initiatives, with quantum-related signings approaching $1 billion and a clear roadmap for quantum advantage by 2026. With that being said, insider buying further reinforces the strong outlook for the future.
