As major AI players waver due to valuation and demand concerns, investors are looking for relatively under-the-radar tech stocks for growth potential. IBM has been gaining ground as the company plans new strategies for a turnaround. The stock is up 16% so far this year.
Wamsi Mohan, Bank of America Global Research senior IT hardware analyst, said in a recent program on CNBC that he believes International Business Machines Corporation (NYSE:IBM) has the ability to meet its targets and called the pullback the company faced “transitory.”
“They’ve divested a lot of assets that were not growing, they’ve invested in assets that are progrowth, and they’re changing the growth profile of this company—and we think for the better. Now when you look at the quarter itself, the quarter was 2% constant currency growth, and the company has guided to about 5% plus constant currency growth for the year. So there’s some skepticism on their ability to meet those targets. When we dig into the numbers, we actually think there is a way for them to meet or beat these kinds of numbers, and that’s really driven by the fact that they’re in a mainframe launch year, and the mainframe still is very relevant, contrary to maybe popular belief, and can be a big driver for numbers.”
Mohan said he is “very bullish” on International Business Machines Corporation (NYSE:IBM).
International Business Machines Corporation (NYSE:IBM) is indeed making a comeback. As of the end of Q4, IBM’s AI products and services surpassed $5 billion in total bookings, with $2 billion added just since last quarter. Last year, IBM Common Stock (NYSE:IBM) updated its Granite family of AI models for enterprise use, making them about 90% more cost-efficient than large models. RedHat is also key in IBM Common Stock (NYSE:IBM) open-source GenAI strategy. Management highlighted that RHEL AI and OpenShift AI platforms are gaining traction, along with IBM Common Stock (NYSE:IBM) watsonx AI solutions.
While we acknowledge the potential of IBM as an investment, 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: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.