International Business Machines (IBM) was boosted today as it was added to a list of top tech titan names set to benefit from the growth in AI spending.
Massive AI Opportunity
Analysts at Wedbush Securities, including three-star TipRanks-rated analyst Daniel Ives, added IBM to its Best Ideas list alongside other stellar names such as Palantir Technologies (PLTR) and Salesforce (CRM).
“The clear standout over the last month from checks has been the cloud penetration success at IBM,” said Wedbush. They said IBM has a massive opportunity to monetize this growth in demand over the next 12 to 18 months. “Adding IBM to the Best Ideas List reflects our incremental confidence in this name,” Wedbush added.
Wedbush analysts said that with AI expected to drive $4.4 trillion in annual productivity gains by 2030, it believes that IBM is well-positioned to capitalize “as more enterprises look to implement AI to drive efficiencies across operations.”
Spending Concerns Remain
Last month, IBM reported fourth-quarter profit that topped Wall Street expectations, fueled by a strong performance in its software division as enterprise IT spending ramped up higher. In particular, there was an increase in demand and growing interest in generative AI technologies.
IBM stock has climbed 13% in the year to date and 35% in the last 12 months as investors warm up to the AI potential within its business. There have been some concerns that a reduction in Federal spending as a result of Elon Musk’s DOGE crackdown could impact its growth path. Other analysts are concerned about IBM’s weak revenue and dividend growth. But Wedbush is sticking to what it knows best.
Is IBM a Good Stock to Buy Now?
On TipRanks, IBM has a Moderate Buy consensus based on 8 Buy, 6 Hold and 1 Sell rating. Its highest price target is $320. IBM stock’s consensus price target is $260 implying an 5.16% upside.
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