Analyst is Bullish on IBM (IBM) Amid a Quantum Computing Catalyst

We recently published 10 Buzzing News to Watch as Investors Look for Best AI Stocks Amid Fed Rate Cuts. International Business Machines Corporation (NYSE:IBM) is one of the best AI stocks amid Fed rate cuts.

Ben Reitzes, Melius Research head of technology research, earlier in October talked about the impact of AI on software. The analyst pointed out to new catalysts for IBM.

“The last couple of years has been AI eating software, and it’s a complete unwinding of 'software is eating the world.' You’re seeing the SaaS companies become the hardware companies, and the hardware companies become more like the SaaS companies, and the semis obviously. We’re seeing a complete value shift that is revaluing hardware. We’re in the early innings for some of the legacy tech. But IBM Common Stock (NYSE:IBM) and Dell are getting a new lease on life. IBM Common Stock (NYSE:IBM) doing a great job, probably in quantum—we’ll see that later this decade—but they’re also reinventing themselves around infrastructure software, which is not SaaS, and it’s priced by the instance.”

IBM is indeed making a comeback. Last year, 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’s open-source GenAI strategy. Management highlighted that RHEL AI and OpenShift AI platforms are gaining traction, along with IBM’s 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 extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.