3 Stocks to Watch From a Prospering Technology Solutions Industry

Industry Overview - The Zacks Computer – Integrated Systems industry includes companies like IBM, HPE, and Agilysys, benefiting from trends such as advancements in data management, integrated deployment techniques, and demand for modern application development [1][3] - The industry is investing in data modernization, cybersecurity, remote work enablement, and supply chain modernization to accelerate digital transformation for enterprise customers [3] Current Challenges - The industry faces significant headwinds from supply chain bottlenecks, rising inflation, higher interest rates, and delays in customer acceptance of new products, leading to substantial order backlogs [2][8] - The ongoing semiconductor chip shortage is impacting the industry's prospects, complicating the transition to cloud computing and affecting datacenter system spending [9][10] Industry Trends - There is a surge in demand for integrated solutions driven by investments in IoT, big data analytics, AI, and blockchain, with expectations of recovering global IT spending [5][7] - The multi-cloud model is gaining traction as enterprises seek better scalability and resource optimization, presenting growth opportunities for industry participants [6][7] Company Highlights IBM - IBM is experiencing solid net sales growth in its software segment, driven by hybrid cloud adoption and demand for AI and security solutions [19][20] - The acquisition of HashiCorp enhances IBM's capabilities in managing complex cloud environments, while its Watsonx platform is central to its AI strategy [21][22] - The Zacks Consensus Estimate for IBM's 2025 earnings has increased by 1.3% to $10.75 per share, with shares gaining 33.9$6.7 billion in cumulative orders for AI products since Q1 fiscal 2023, with backlogs reaching $3.5 billion [27] - The Zacks Consensus Estimate for HPE's fiscal 2025 earnings has increased by a penny to$2.11 per share, with shares rising 37.3% in the past year [29] Agilysys - Agilysys is experiencing strong growth driven by record sales in property management systems and increasing subscription revenues [31][32] - The acquisition of Book4Time has expanded Agilysys' customer base by 30% and contributed significantly to revenue growth [33] - The Zacks Consensus Estimate for Agilysys' fiscal 2025 earnings has decreased by 3.1% to $1.27 per share, with shares declining 6.4% in the past year [34]