International Business Machines Corporation (NYSE:IBM) is one of the AI Stocks on Analysts’ Radar Right Now. On July 21, BofA Securities analyst Wamsi Mohan reiterated a “Buy” rating and a $320.00 price target on the stock.
The firm sees a “tough near-term setup given YTD outperformance but structural LT tailwinds.” It believes Red Hat (RHT) will grow faster, and that foreign exchange tailwinds may also be present. However, there may be weaknesses in IBM’s consultancy business, similar to those of its peers.
“IBM reports F2Q25 earnings on July 23rd, and we believe investors expect an acceleration in RHT, potential FX tailwinds, and for Consulting to be weak (similar to peers). While the tactical setup is a bit challenging given decelerating trends in parts of the business, we reiterate our Buy rating as we continue to view IBM as a defensive investment with improving revenue growth, which in turn can drive higher cash flows that could be re-invested for more M&A. We expect IBM to largely maintain its overall guide for the year but with slightly lower Transaction processing (TP) and slightly better RHT.”
Credit: IBM
Investors likely to focus on organic growth trends:
While RHT would accelerate slightly and remains an important part of the bull case on IBM, we expect TP to modestly decelerate and overall software growth (ex-Hashicorp contribution of ~$200mn) to decelerate on an organic cc basis from 9% in 1Q to 6% in 2Q and model modest acceleration into 3Q.
While bears could argue such a deceleration would continue into the future, we view the TP deceleration as not structural and expect IBM to benefit from share gains in RHT from VMware. We expect 2Q25 reported growth of 4.7%, cc growth of 2.3%, organic cc growth of 1% and organic cc less Infrastructure (Mainframe+, Power -) contribution of 0.7%. We view growth in 2Q as not indicative of the trajectory for the rest of the year especially with TP and RHT reacceleration.”
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.
When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.
Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.
At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.
Do the math. According to Musk, this technology could be worth $250 trillion by 2040.
Put another way, that’s roughly equal to:
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107 Amazons
140 Metas
84 Googles
65 Microsofts
And 55 Nvidias
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Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.
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Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
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