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International Business Machines Corporation (IBM): Street Analysts Are Bullish on This Consulting Stock Now

We recently compiled a list of the 14 Best Consulting Stocks to Buy Now. In this article, we are going to take a look at where International Business Machines Corporation (NYSE:IBM) stands against the other consulting stocks.

After the market rebounded in 2021 post-pandemic, the US consulting industry now faces a complex and uncertain landscape. Rising inflation, increased costs, talent shortages, and supply chain disruptions amid a volatile geopolitical climate are challenging the sector. Despite these hurdles, 66% of clients plan to increase their use of consultants over the next year. However, clients are becoming more cautious, opting for smaller, tactical projects to address immediate issues rather than engaging in lengthy, expensive transformation initiatives. This approach allows them to assess the impact of their investments before committing further. According to the 2023 report by Source Global Research, consulting firms must now deliver results within tighter timeframes amid heightened competition for smaller, sequential project components. Clients are increasingly seeking innovative and data-driven solutions, reflecting a desire for new and novel approaches throughout the project lifecycle. This shift highlights the need for consulting firms to adapt and excel in an environment where macroeconomic challenges have dampened post-pandemic optimism.

In 2021, the US experienced significant growth as clients invested in growth initiatives, buoyed by optimism and capital following the pandemic. However, by the end of 2022, the mood shifted due to rising inflation, energy prices, and political tensions, which hindered business operations and growth opportunities. Clients remain cautious, anticipating a potential global recession. Nevertheless, some clients remain hopeful, with around a third believing that current macroeconomic factors could positively impact their organizations. With technology being a top priority for clients, it’s no surprise that technology firms are leading the market. Clients are investing heavily in technology, which translates into significant consulting spend. Over the past year, two of the top three consulting areas were technology-related: 77% of clients invested in technology strategy and 71% in technology implementation. Productivity improvement, which often involves technology, ranked second at 73%. Although the market is crowded, technology firms are benefiting the most. Clients prefer these firms for their specialized technology solutions, which they believe offer more reliable outcomes compared to other providers, even if it means higher costs.

Uncertainty in the global economy is causing significant disruption in the US consulting industry, with firms dealing with project cancellations and clients pushing for lower fees, reported Financial Times. The report by Source Global Research highlights a major reassessment of consultants by US clients due to economic concerns. Over 75% of professional services buyers have cancelled or scrapped projects, and two-thirds have paused most existing work. The report forecasts 11% revenue growth in 2023, consistent with 2022, but notes increasing pressure on consultants’ fees, with clients now expecting lower rates compared to before the pandemic. Clients are more focused on getting value for money, with only about 50% believing firms provide value above their fees. Areas such as cybersecurity, HR consulting, and M&A for private equity firms are experiencing slowdowns. While IT consulting remains strong, it is targeted at projects that deliver quick financial benefits. The decline in hiring, initially observed in the Big Four accounting and consulting firms, has extended to smaller players as well. According to a survey by investment bank William Blair, job postings by US specialty consultants were down 57% in June 2023 compared to the previous year and have fallen below pre-pandemic levels. At the Big Four, job postings have decreased by 80% year-on-year.

There is one long-term trend that we haven’t talked yet affecting consulting firms positively. The rise of generative AI, a powerful new technology that can create realistic text and images, has sparked a gold rush for consulting firms. Companies like Reckitt Benckiser, unsure of how to leverage this technology, are turning to consultants for guidance. This has led to a surge in revenue for these firms, with some like McKinsey seeing 40% of their business coming from AI-related work. Consulting firms are among the early winners of the AI revolution which is why we believe this may be a good time to invest in consulting stocks. However, 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 more promising than consulting companies but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

Our Methodology

We leveraged Insider Monkey’s comprehensive database of 920 prominent hedge funds to identify the top 14 consulting stocks with the highest level of hedge fund investment as of Q1 2024. These stocks are listed in order of increasing hedge fund ownership, providing insight into the most popular consulting stocks among elite investors.

A closeup of a woman’s hands typing rapidly on a laptop in a corporate office setting.

International Business Machines Corporation (NYSE:IBM)

Number of Hedge Fund Holders: 49

International Business Machines Corporation (NYSE:IBM) offers integrated solutions and services globally through its Software, Consulting, Infrastructure, and Financing segments. The Software segment provides hybrid cloud and AI platforms for digital and AI transformations. The Consulting segment focuses on strategy, experience, technology, and operations integration by industry. RBC Capital recently raised International Business Machines Corporation (NYSE:IBM) stock price target to $211 from $200, maintaining an Outperform rating. This follows IBM’s strong performance, including a significant increase in its Generation AI (GenAI) business, which doubled to $2 billion. RBC Capital highlighted IBM’s robust free cash flow (FCF), exceeding expectations and supporting forward guidance through fiscal year 2025. Despite a temporary slowdown in its Red Hat segment, International Business Machines Corporation (NYSE:IBM) management is optimistic about growth in the second half of the year. The improved revenue forecast and FCF outlook for fiscal year 2024 indicate stable performance. The doubling of International Business Machines Corporation (NYSE:IBM) GenAI business to $2 billion underscores its innovation and market position in AI. RBC Capital’s positive outlook on IBM’s trajectory and the increased price target suggest favorable stock value prospects.

In the first quarter of 2024, the number of hedge funds with stakes in International Business Machines Corporation (NYSE:IBM) decreased to 49 from 50 in the previous quarter, according to Insider Monkey’s database of 920 hedge funds. The combined value of these stakes is approximately $1.007 billion. Ken Griffin’s Citadel Investment Group emerged as the largest stakeholder among these hedge funds during this period.

Overall IBM ranks 2nd on our list of the best consulting stocks to buy. You can visit 14 Best Consulting Stocks to Buy Now to see the other consulting stocks that are on hedge funds’ radar. While we acknowledge the potential of IBM as an 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 more promising than IBM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June.

Disclosure: None. This article is originally published at Insider Monkey.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
  • It’s one of the only global companies capable of executing large-scale, complex EPC (engineering, procurement, and construction) projects across oil, gas, renewable fuels, and industrial infrastructure.
  • It plays a pivotal role in U.S. LNG exportation—a sector about to explode under President Trump’s renewed “America First” energy doctrine.

Trump has made it clear: Europe and U.S. allies must buy American LNG.

And our company sits in the toll booth—collecting fees on every drop exported.

But that’s not all…

As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.

AI needs energy. Energy needs infrastructure.

And infrastructure needs a builder with experience, scale, and execution.

This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap.

It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium.

And here’s what the smart money has started whispering…

The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

They’re sharing it quietly, away from the cameras, to rooms full of ultra-wealthy clients.

Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
  • The onshoring boom driven by Trump-era tariffs
  • A surge in U.S. LNG exports
  • And a unique footprint in nuclear energy—the future of clean, reliable power

You simply won’t find another AI and energy stock this cheap… with this much upside.

This isn’t a hype stock. It’s not riding on hope.

It’s delivering real cash flows, owns critical infrastructure, and holds stakes in other major growth stories.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

Don’t be a spectator in this technological revolution.

Dive into the AI gold rush and watch your portfolio soar alongside the brightest minds of our generation.

This isn’t just about making money – it’s about being part of the future.

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…