1. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holdings in Q1 2026: 59
International Business Machines Corporation (NYSE:IBM) is one of Jim Cramer’s favorite stocks. The shares are up by a modest 1.3% over the past year and are flat year-to-date. Some of the reasons why the CNBC TV host likes International Business Machines Corporation (NYSE:IBM) are its quantum computing and its software business. Throughout 2025, he asserted that the firm was among the few quantum computing stocks to buy. In this appearance, he touted International Business Machines Corporation (NYSE:IBM) as a tech stock to buy if one didn’t want exposure to data centers:
“You know people who might want tech, without the cauldron of the data centers, should be looking at IBM. Really excellent piece today from Bank of America, raising price target, raising earnings per share. It’s got some, of course, AI, but it really is this great computer company and it sells at 22 times next year’s earnings. I think this one works. I know it got hit very badly when they reported, but I think that it’s going to be a good idea.”
Green Alpha Investment discussed International Business Machines Corporation (NYSE:IBM) in its Q1 2026 investor letter:
IBM has published the industry’s first reference architecture for quantum-centric supercomputing, a blueprint that integrates quantum processors alongside GPUs and CPUs into a unified computing environment for tackling problems in chemistry, materials science, and optimization that no classical approach can solve alone. The company states 2026 will mark the first time a quantum computer outperforms all classical-only methods on a real scientific problem. Paired with a new 10-year research collaboration with ETH Zurich on next-generation AI and quantum algorithms, IBM is building the foundational infrastructure for the next era of computing.
IBM’s hybrid cloud and AI platform, anchored by Red Hat OpenShift, continues to serve as the enterprise backbone for thousands of government and corporate entities in financial services, telecom, and healthcare. The recent ~$11 billion acquisition of Confluent strengthens real-time enterprise data streaming, while expanded collaborations with NVIDIA and ARM deepen IBM’s AI infrastructure capabilities. The company is systematically positioning itself at the intersection of quantum computing, high-performance AI, and enterprise hybrid cloud—the architectural layer where next-generation scientific and commercial breakthroughs will be orchestrated.
While we acknowledge the potential of IBM to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than IBM and that has 100x upside potential, check out our report about the cheapest AI stock.
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