International Business Machines (IBM) Cut to Hold on Weak Consulting Growth and Infrastructure Slowdown

International Business Machines Corporation (NYSE:IBM) is one the Top 10 AI Stocks in Focus on Wall Street. On February 18, Erste Group analyst Hans Engel downgraded IBM (NYSE: IBM) from Buy to Hold. Despite IBM’s positive AI outlook, the firm has flagged slowing infrastructure momentum for the stock, weak consulting growth, and financial pressures. These factors, it noted, have led to expectations of sideways price action.

Taking a balanced view of the company’s outlook, Erste Group noted how IBM’s management is focused on the monetization of artificial intelligence via cloud services, as well as the development of proprietary AI chips.

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However, on the negative side, it noted that the company’s operating margin has recently fallen sharply and long-term liabilities have risen. Given these offsetting factors, the firm believes that the stock may, for the medium term, struggle to gain upward momentum.

For the time being, it seems realistic to expect the stock price to move sideways in the medium term.

International Business Machines Corporation (NYSE:IBM) is a multinational technology company and a pioneer in artificial intelligence, offering AI consulting services and a suite of AI software products.

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