Jim Cramer’s Game Plan: 23 Stocks to Watch

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10. International Business Machines Corporation (NYSE:IBM)

Number of Hedge Fund Holders: 54

Cramer commended the CEO of International Business Machines Corporation (NYSE:IBM), saying:

“IBM also reports after the close, and I bet we’ll get another beat and raise quarter. Why? Because it’s become a beat-and-raise machine under CEO Arvind Krishna. Enough said.”

International Business Machines (NYSE:IBM) has long been a pioneer in the field of artificial intelligence, tracing its innovations back to the 1970s with breakthroughs such as the first speech recognition system and a programming language for self-learning robots. Recent analysis from IFI Claims highlighted that IBM made 1,591 AI-related patent applications, surpassing competitors like Google by a significant margin.

In line with a more focused patenting strategy announced last year, the company has concentrated its efforts on five key areas, with AI being a primary focus for future innovation. Since Arvind Krishna took over as CEO in 2020, the company has aligned its objectives around AI and cloud technologies, a direction that has proven effective as demand for AI solutions has surged over the past year.

In the second quarter, the company’s software division, which includes cloud and AI sales, generated revenue of $6.7 billion, reflecting a 7% increase. The division accounted for 43% of the company’s total revenue of $15.8 billion in the same period.

The introduction of the Watsonx generative AI platform in 2023 marked another significant step for International Business Machines (NYSE:IBM), securing over $2 billion in contracts shortly after its launch. While software is a vital component of the company’s offerings, CEO Arvind Krishna noted that the business is balanced, with approximately one-quarter coming from software and three-quarters from consulting engagements. Krishna emphasized that the company’s plan in AI positions the company well for future growth, as the technology continues to evolve and gain traction in the market.

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