Why Stifel Says International Business Machines (IBM) Remains a Top Large-Cap Defensive AI Stock

International Business Machines Corporation (NYSE:IBM) is 1 of the 10 AI Stocks Making Waves connected Wall Street. On January 29, Stifel expert David Grossman raised the terms people connected the banal to $340 from $325 portion maintaining a Buy rating. IBM remains apical large-cap antiaircraft pick, with analysts highlighting its FCF beat, robust bundle growth, and 2026 PTI guide.

IBM’s fourth-quarter 2025 were in-line oregon somewhat supra statement expectations, with 7% integrated gross maturation and 15% net per stock growth. The steadfast noted that adjusting for the planned inclusion of Confluent, anticipated to adjacent successful mid-2026, the company’s 2026 revenue/margin guidance was mostly inline with bundle maturation and assumed to accelerate arsenic twelvemonth progresses.

Stifel noted that the cardinal astonishment successful the 4th was IBM’s $0.7bn, oregon 10%, 4Q25 FCF outperformance and 2026 FCF guidance besides came successful $0.7bn (4–5%) supra consensus. It added that an unexpected Q4 rebalancing complaint besides explains immoderate of the outperformance.

IBM shares roseate after-market hours, a reflection of its FCF outperformance, robust bundle performance, and weakness starring into the report.

“IBM is present trading astatine ~35% premium to equal-weight S&P500, in-line with LTM trend. While we wouldn’t pursuit the stock, it remains our apical large-cap antiaircraft pick.”

International Business Machines Corporation (NYSE:IBM) is simply a multinational exertion institution and a pioneer successful artificial intelligence, offering AI consulting services and a suite of AI bundle products.

While we admit the imaginable of IBM arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you're looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the champion short-term AI stock.

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Disclosure: None. This nonfiction is primitively published astatine Insider Monkey.