We recently published a list of 10 Mid-Cap IT Stocks Outperforming The Market In 2025. In this article, we are going to take a look at where Kyndryl Holdings Inc. (NYSE:KD) stands against other mid-cap IT stocks outperforming the market in 2025.
US Stocks continue their recovery from a post-DeepSeek and post-tariffs period as nerves surrounding Donald Trump’s unpredictable policies calm down. The Nasdaq is surging 1.19% followed by the S&P 500 at 0.64%. The bullishness is expected to continue for the remainder of the day.
To determine which stocks could outperform the market in the coming months, it is essential to look at sectors that are benefitting from ongoing trends. IT stocks are unique in a way that with time, all companies have to spend more to keep their systems updated. Analysts expect companies to add 5% to their IT budgets in 2025. This, together with the increasing demand for AI products, will propel the sector’s returns in 2025.
Some companies have already started the year on a positive note. There are companies that are seeing increasing demand for their innovative products while others continue to serve the infrastructure involved in deploying these innovative solutions. Either way, it is important to look at what’s driving these stocks.
We decided to take a look at the top 10 mid-cap IT stocks that are outperforming the market in 2025. To come up with our list, we only considered stocks with a market cap of at least $10 billion with the highest return since the start of the year.
A group of engineers in a data center, ensuring IT resiliency.
Kyndryl Holdings Inc. (NYSE:KD)
Kyndryl Holdings Inc. is an IT infrastructure services provider that offers core enterprise & zCloud services, digital workplace services, network & edge services, cloud services, and other services. It provides its services to technology, retail & travel, financial, automotive, and media & telecom industries. The stock is up 20% this year but has already doubled in the last year.
Kyndryl has signed several important deals in 2024, essentially driving the optimism behind the stock. While a $2 billion agreement was the highlight of the year, nearly a dozen other deals amounting to over $100 million each have made investors realize the company can make consistent and stable income. The CEO believes this response from the company is proof that the company’s investments and vision are bearing fruit. As IT systems grow more and more complex by the day, Kyndryl’s ability to manage these systems will become increasingly relevant.
Despite shrinking revenues, the company was able to increase its gross profit, which suggests active efforts to run the business more efficiently. A healthy and growing cash flow, together with short-term liquidity of $4.5 billion, position the company strongly for a good year ahead.
Overall, KD ranks 4th on our list of mid-cap IT stocks outperforming the market in 2025. While we acknowledge the potential of KD as a leading AI 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 KD 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.