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UBS Upgrades IBM, Sees More Balanced Expectations Ahead

International Business Machines Corporation (NYSE:IBM) is included among the 13 Most Promising Long-Term Stocks to Buy According to Hedge Funds.

On February 24, UBS upgraded International Business Machines Corporation (NYSE:IBM) to Neutral from Sell and set a price target of $236. The upgrade reflects a more balanced view of the stock following recent volatility and changing expectations.

A CNBC report published on February 23 said IBM shares came under significant pressure that day. The stock fell about 13.2% to close at $223.35. The decline followed an announcement from Anthropic about its Claude Code AI tool, which can help modernize older systems built using COBOL. This development raised concerns among investors, as COBOL has long been closely associated with IBM’s mainframe business.

IBM has played a central role in supporting COBOL-based systems for decades. These systems continue to run critical operations, including banking transactions, payment processing, and retail infrastructure. Maintaining and modernizing these systems has traditionally required significant time and specialized expertise. Anthropic said its AI tool can automate much of the work involved in analyzing and updating COBOL code. This process has historically been complex and costly. COBOL, first introduced in the late 1950s, still supports essential infrastructure such as ATM networks, airline systems, and government operations.

The company noted that the number of programmers skilled in COBOL has declined over time. AI tools can now analyze large codebases more quickly, identify dependencies, document workflows, and highlight risks. Tasks that once took months can now be completed much faster. Anthropic also said modernization efforts were often delayed because updating legacy code was expensive and difficult. With AI simplifying that process, companies may have more flexibility in modernizing their systems. This could reduce reliance on traditional service providers over time.

These developments have added to broader investor concerns about AI’s potential impact on established technology companies. IBM is among the firms facing questions about how AI could reshape legacy software and IT services.

International Business Machines Corporation (NYSE:IBM) provides hybrid cloud, artificial intelligence, and consulting services. Its business operates through four main segments: Software, Consulting, Infrastructure, and Financing.

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 this cheapest AI stock.

READ NEXT: 13 Best Strong Buy Dividend Stocks to Invest In and Goldman Sachs Dividend Stocks: Top 14 Stock Picks

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The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this 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:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

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