Here's Why IBM's AI Growth Makes It a Stock to Buy Now
IBM's AI strategy is paying off with explosive acceleration after a slow start. Are you paying attention to this unsung hero of enterprise-class computing?
There are many reasons to invest in IBM (NYSE: IBM) these days. The centennial tech giant is a leading researcher in quantum computing. The stock trades at modest valuation ratios, like 18.5 times free cash flow and 21.6 times forward earnings. And Big Blue's 2.8% dividend yield is more than twice the average among S&P 500 (SNPINDEX: ^GSPC) stocks.
But one piece of my investment thesis for IBM weighs heavier than the rest. Above all, IBM is a powerhouse in business-class artificial intelligence (AI). The company has been preparing itself for this unique point in computing history, and AI growth should drive IBM stock much higher in the next few years.
IBM was quick to respond when OpenAI unleashed ChatGPT in November 2022. Six months later, Big Blue released the Watsonx platform of generative AI tools for corporate clients.
