We recently published a list of 9 AI Stocks In Focus: Tariffs and Key Updates. In this article, we are going to take a look at where International Business Machines Corporation (NYSE:IBM) stands against other AI stocks in focus.
President Donald Trump’s new tariff regimes have been introduced under the International Emergency Economic Powers Act. A 10% tariff was imposed on nearly all countries and territories this Saturday, with rates expected to escalate higher and become even more individualized for the “worst” offenders. In a tit-for-tat blow against Trump and his tariffs, China has moved to impose a 34% tax on all US goods.
Investment firm Wedbush has recently criticized these tariffs, citing them as a potential “economic Armageddon” for the U.S. tech sector. Analysts headed by Dan Ives believe that the impact of these tariffs could be even worse than previous major market crashes, such as the dot-com bubble and the 2008 financial crisis. This could wipe out a decade of technological progress in the US.
READ ALSO: Tariff Hits and More: 10 AI Stocks in the Spotlight and 9 Trending AI Stocks Making Headlines Today.
“The concept of taking the U.S. back to the 1980′s ‘manufacturing days’ with these tariffs is a bad science experiment that in the process will cause an economic Armageddon in our view and crush the tech trade, AI Revolution theme and overall industry in the process.”
Another investment firm, Bernstein, notes how China imports $10 billion worth of chips from the United States annually. $8 billion of these are Central Processing Units (CPUs) from Intel, commonly used in laptops and servers. Since China is its largest market in 2024, it will be impacted by the tariffs. Other companies being hit by the tariffs include Micron, considering some of its chips sold in China are imported from the US. This is despite the country having production facilities in China and other countries.
All in all, the firm is persistent that continued tariffs would imply lower growth, lower revenues, and lower profits for companies.
“The higher than expected tariff rates … were not factored into many investors’ or companies’ calculations. The question is will there be enough time for them to actually get those numbers in in time? Because we don’t know what the retaliation measures are going to be from some of the European partners … or even from other countries, in that sort of scenario exact numbers might be lacking in some cases”.
-Chandrasekaran.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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: 60
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. On April 7, the company announced the acquisition of Hakkoda Inc., a leading global data and AI consultancy. The acquisition will allow Hakkoda Inc. to expand IBM Consulting’s data transformation services portfolio, helping fuel clients’ AI transformations.
“IBM is at the leading edge of the consulting industry with how we’re supercharging our consultants with AI. With Hakkoda’s data expertise, deep technology partnerships and asset-centric delivery model, IBM will be even better positioned to deliver value faster to clients as they transform with AI.”
-Mohamad Ali, Senior Vice President and Head of IBM Consulting.
Overall, IBM ranks 8th on our list of AI stocks in focus. 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 time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.