International Business Machines Corporation (NYSE:IBM) is one of the Buzzing AI Stocks on Wall Street. On August 14, Erste Group analyst Hans Engel downgraded the stock from Buy to Hold, reflecting the challenges IBM is facing in accelerating its revenue growth to contest broader technology sector performance.
According to the analysts, IBM’s sales growth is “well below” the sector average which isn’t expected to change this year. They believe that current valuation is “high in view of the below-average growth prospects.”
“IBM’s sales growth is well below the sector average. This is not expected to change this year either. The Group’s latest forecast for 2025 assumes moderate revenue growth of at least +5% (y/y). The free cash flow forecast has been left at USD 13.5 bn. The current P/E ratio of the stock is high in view of the below-average growth prospects.”
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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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