International Business Machines Corporation (NYSE:IBM) is one of the Must-Watch AI Stocks on Wall Street. On July 29, Bank of America reiterated the stock as “Buy” with a $310 price target.
The firm said shares of IBM have more room to run. Mohan is optimistic about the stock, stating how the company is transitioning toward higher-margin software. This, in turn, is expected to bring strong growth in free cash flow. There has been some volatility in transaction processing revenue tied to IBM’s mainframe base, but despite of this, future prospects look promising.
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IBM has also introduced several new technologies, particularly the z17 mainframe and AI acceleration through Spyre cards. These are expected to boost transaction processing growth. Meanwhile, the strong shipment of MIPS is anticipated to drive potential revenue upside.
These positive developments, favorable valuation, and anticipated re-acceleration in transaction processing growth have all led to the buy rating for the firm.
“We view IBM as a defensive investment given its high exposure to recurring sales, cost cutting levers, solid balance sheet, potential share gains, and relatively stable margins.”
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.
While we acknowledge the potential of IBM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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