Summarize and humanize this content to 2000 words in 6 paragraphs in English Shares of International Business Machines (NYSE: IBM) rose 13% in the first quarter of 2025, according to data from S&P Global Market Intelligence. The tech veteran’s stock has taken a modest hit amid the tariff drama of early April, but remains well ahead of the S&P 500 (SNPINDEX: ^GSPC) market index on a year-to-date basis. IBM’s chart diverged from the broader market twice in the first quarter. First, Big Blue reported fantastic fourth-quarter results on Jan. 29. Bottom-line earnings of $3.92 per share beat Wall Street’s consensus estimates by $0.12. CEO Arvind Krishna highlighted strong growth in the Red Hat segment, alongside game-changing client interest in the WatsonX generative artificial intelligence (AI) platform. The list of long-term deals for generative AI products and services stood at $5 billion by the end of the year, up from $3 billion in the previous quarter. Driven by these overarching growth trends, management expected full-year revenue growth to accelerate from 1% in 2024 to approximately 5% next year. IBM’s stock gained more than 14% the next day, backing down to a still-impressive 13% jump at the closing bell. The second bump came on March 7, where IBM’s stock jumped 5.2% on a generally quiet day for the stock market. IBM’s biggest news that day was the opening of a cloud computing research center in Romania. This is a joint project with Amazon and its Amazon Web Services (AWS) unit, boosting both companies’ access to the thriving European market and local engineering talent. Any expansion of the IBM-to-Amazon relationship is excellent news for Big Blue, since Amazon relies on this company’s consulting services to manage and support AWS contracts around the world. IBM’s tariff tumble hasn’t been particularly dramatic, simply following the S&P 500’s 9% percentage drop in April. All told, IBM investors have seen a 20% gain over the last year, while the S&P 500 is back where it started with a 2% drop. IBM’s advantage grows larger if you include reinvested dividends, since Big Blue’s 3% dividend yield is about twice the average payout across the popular market index. This company was a bit slow to join the AI market surge, but IBM’s enterprise-focused approach to generative AI tools has started to pay off. The stock is still quite affordable even after the recent surge, trading at 3.3 times sales and 17 times free cash flow. If you’re looking for a great AI stock trading at a modest price, IBM is one of my top picks right now. Before you buy stock in International Business Machines, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and International Business Machines wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $461,558!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $578,035!* Now, it’s worth noting Stock Advisor’s total average return is 730% — a market-crushing outperformance compared to 147% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of April 5, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Anders Bylund has positions in Amazon and International Business Machines. The Motley Fool has positions in and recommends Amazon and International Business Machines. The Motley Fool has a disclosure policy. How IBM Soared 13% While Markets Sank in Q1 2025 was originally published by The Motley Fool
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