IBM’s stock is up 20% in the last seven months. Astonishingly, those who regard IBM as a pure AI giant do not see this trend. IBM, despite being a tech giant, isn’t considered the most innovative one. This is one reason why its AI achievements go under the radar. We believe investors shouldn’t ignore IBM as an AI play and that it holds potential.
IBM, formally known as International Business Machines Corporation, is still among the top players in the world as far as information technology is concerned. The company’s portfolio consists of cloud computing, artificial intelligence, data analytics, and advisory services. The enterprise, which is anchored in New York as one of the biggest industrial organizations in the world, has all the traits that are necessary to perform large-scale research based on innovation just like the development of quantum computing.
IBM’s top products are IBM Cloud, IBM Watson, data management, software, cybersecurity services, and enterprise consulting. Sales of software, cloud subscriptions, consulting services, and hardware make up the majority of the revenue.
From large companies to small operations, including telecommunications, finance, healthcare, government, and production, IBM serves a broad clientele. Its end market is organizations looking for next-generation technology solutions to improve the efficiency of their operations, digitalize their processes, and store and manage big data.
IBM is attempting to leverage its relationship with AMD and AWS to carve out a niche as a dominant player in the AI arena. The GPU upgrade along with a special version of large language models (LLMs) will make its 2025 roadmap even more robust. As a result of these partnerships, the company is well on its way to becoming an important player in the AI world.
Shifting focus towards open-source AI models is a game-changer for the company. As these models continue to grow, they are increasingly becoming empowering tools for businesses like IBM. Similarly, its Global Business Services division is equally contributing to the integration of AI solutions, enabling companies to yield incredible results.
We are bullish on IBM. With strategic shifts towards AI integration, alongside strong partnerships and a focus on open-source innovation, IBM is in a great position to capitalize on the AI boom. With a breakout year promised in 2025, IBM is the AI stock to watch out for.
IBM is not on our latest list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 56 hedge fund portfolios held IBM at the end of the third quarter which was 54 in the previous quarter. While we acknowledge the potential of IBM as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as IBM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
