Wall Street said to technology companies’ biggest optimists that even if the stock market has been working hard, spending on artificial intelligence has been rising over the past few weeks, and IBM has a great chance of benefiting.
In a Monday morning research report, Wedbush Securities managing Director Daniel Ives estimates that AI spending occurs at about 12% of many IT budgets and in some cases even 15%. Those figures are 10% higher than his January estimates are based on checks that have monitored dozens of big companies over the past few weeks.
Ives is a so-called Perma Bull, which means he has shown unwavering belief in American tech companies and offers prospects for his stock. His estimate stands out as technology stocks have been hammered, and the Nasdaq Composite has dropped in four out of five weeks, losing 11%.
The rise in AI budgets may help solve the problem, i.e. the price of technology stocks already reflects the potential benefits of AI. These stocks have dropped over these concerns and uncertainty about Trump administration policies, such as tariffs.
“So far, over the past six months, we’ve talked about driving along the AI ​​path that accelerates their AI budgets and plans to achieve the speed of this technology spending cycle,” he wrote. The companies Wedbush talks to include financial services, healthcare, transportation and logistics, among others.
According to Ives, Palantir and Salesforce stocks remain the two best software for 2025. But he now adds IBM to the Wedbush best idea list, reflecting greater confidence in the company.
“Last month, the clear standout of the inspection was IBM’s cloud penetration success, which has a great opportunity to profit from its installation base over the next 12 to 18 months,” he wrote.
IBM’s stock has lost 6.7% over the past five weeks. It grew 1% in early Monday trading.
Brian Essex of JP Morgan is more cautious about the name. He reiterated his neutral rating on stocks on Sunday, saying IBM could be affected by disruptions from federal procurement as the Trump administration actively tried to save money. According to JP Morgan, federal spending is less than 5% of IBM’s revenue.
