IBM Seen as ‘Stable Compounder’ — Stifel Lifts Price Target Ahead of Q2

International Business Machines Corporation (NYSE:IBM) is one of the AI Stocks Investors Are Watching Closely.  On July 16, Stifel analyst David Grossman reaffirmed a “Buy” rating for the stock and increased the price target from $290.00 to $310.00. Stifel’s rating reflects continued optimism for IBM’s projected financial performance and potential growth ahead of its second-quarter earnings report due on July 23.

The firm believes that IBM is a “stable/defensive compounder” with mid-single-digit revenue growth potential and annual margin expansion. This should yield mid-to-high-single-digit earnings along with free cash flow growth.

Some factors highlighted by the firm that may act as revenue tailwinds for the stock are its z17 mainframe cycle released in mid-June and IBM’s capability to leverage recent software acquisitions like Hashi and DataStax.

IBM Seen as ‘Stable Compounder’ — Stifel Lifts Price Target Ahead of Q2

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Nevertheless, Grossman noted that even though fundamentals for the stock are stable/positive, it may be difficult to forecast upward earnings revisions in the current environment. This can be risky heading into the earnings report, which is why a post-Q2 earnings report may be a better entry point.

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.

While we acknowledge the risk and 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 time frame. If you are looking for an AI stock that is more promising than IBM and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.