Here's Why IBM's AI Growth Makes It a Stock to Buy Now

Group 1: IBM's AI Strategy and Growth - IBM is a leading player in business-class artificial intelligence (AI) and is expected to see significant stock growth driven by AI advancements [2][10] - The company launched the Watsonx platform for generative AI tools aimed at corporate clients shortly after the release of ChatGPT, differentiating itself from consumer-focused models [3][4] - IBM's Watsonx business has rapidly grown, with contracts increasing from over $1 billion in Q1 2024 to over$5 billion by the end of the year [6][10] Group 2: Consulting Services as a Competitive Advantage - Approximately 80% of IBM's generative AI order book consists of consulting contracts, highlighting the importance of consulting services in its business model [7][9] - Unlike competitors such as Microsoft, Alphabet, and Amazon, IBM places significant emphasis on consulting services, which are integral to its AI offerings [8][9] Group 3: Financial Performance and Valuation - IBM reported $62.8 billion in total revenue last year, generating$12.7 billion in free cash flow, with the AI-driven segment growing rapidly [10] - The stock trades at modest valuation ratios, suggesting potential for significant appreciation compared to peers like Amazon and Microsoft [11][12]