15 AI Stocks Analysts Are Watching: Microsoft, Nvidia, and More

12. International Business Machines Corporation (NYSE:IBM)

Number of Hedge Fund Holders: 59

On June 23, JPMorgan upgraded International Business Machines Corporation (NYSE:IBM) to Overweight from neutral and hiked its price target to $291 from $270. The firm said it sees “software acceleration” for the stock and that there could be room for multiple expansion.

We are upgrading to Overweight with greater confidence in a 2H’26 CC software acceleration following a deeper look at IBM’s software business.

The firm noted how software continues to drive better recurring revenue, margins, profitability, and cash flow. An estimated 45% of revenue and about two-thirds of consolidated profit for IBM comes through software, it added.

We view the continued shift toward software as positive considering the higher-margin, ratable nature of software with better cash conversion and a higher-quality earnings stream that supports a higher multiple than the hardware and services businesses.

It noted how IBM’s businesses, hybrid cloud, automation, transaction processing, and data, can help reinforce each other and support demand for infrastructure projects. The firm believes that investors may be underestimating how stable this “engine” is.

International Business Machines Corporation (NYSE:IBM) is a multinational technology company and a pioneer in artificial intelligence, offering AI consulting services and a suite of AI software products.