We recently published a list of Analysts Are Talking About These 10 AI Stocks. In this article, we are going to take a look at where International Business Machines Corporation (NYSE:IBM) stands against other stocks that analysts are talking about.
Gene Munster from Deepwater Asset Management said in a latest program on CNBC that the AI hardware trade is still intact and the analyst believes DeepSeek is a net positive for the industry.
“The consensus DeepSeek has been a positive for AI. I think when it comes to the cost of AI inference, it’s going to go through the floor. Sam Altman said after DeepSeek that they expect the cost of tokens to go down 10 to 12x per year for their second-tier model. I mean, that’s basically through the floor. And I think the third piece to this, if those two happen, we get this hardware build-out, we the cost of compute or the cost of inference declining. I think you’re going to see some just profound impacts. And so I’m still bullish on this market. I think that what we’re seeing right now is a funk, and I think that we still got two great years left of this AI trade.”
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For this article, we picked 10 AI stocks currently making moves on the back of the latest news. With each stock, we have mentioned its hedge fund sentiment. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Investors: 60
Mish Schneider from MarketGauge said in a latest program on Schwab Network that International Business Machines Corporation (NYSE:IBM) has made a strong comeback after being forgotten for a while.
“What you’d really be looking for right now with IBM is for it to take out, say, 260. And then, if it can get through 260 again—it’s been trading between 245 and 260—then I think you have a situation where you could see 350, maybe even higher. Of course, market conditions always prevail. If we get some kind of major liquidation all around, that will affect everything. But that’s a company everyone forgot about, and now, all of a sudden, Big Blue is back in vogue.”
IBM is indeed making a comeback. As of the end of Q4, IBM’s AI products and services surpassed $5 billion in total bookings, with $2 billion added just since last quarter. Last year, IBM updated its Granite family of AI models for enterprise use, making them about 90% more cost-efficient than large models. RedHat is also key in IBM’s open-source GenAI strategy. Management highlighted that RHEL AI and OpenShift AI platforms are gaining traction, along with IBM’s watsonx AI solutions. The company expects its software business to grow by at least 10% in 2025, up from 8.3% growth in 2024.
Overall, IBM ranks 10th on our list of stocks that analysts are talking about. While we acknowledge the potential of IBM as an investment, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than 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 is originally published at Insider Monkey.