Evercore Reaffirms ‘Outperform' on IBM With Strong EPS Forecast
International Business Machines Corporation (NYSE:) is one of the 10 AI Stocks in the Spotlight. On June 20, Evercore ISI analyst Amit Daryanani reiterated an 'Outperform' rating on the stock with a $315 price target. The firm expects IBM to maintain mid-to-high single-digit revenue growth as well as double-digit growth in earnings per share and free cash flow in the coming years. This growth would enable the company to potentially generate $16 to $18 in annual EPS within the next three years.
A portfolio manager, confident in her analysis, inspecting several stocks on her laptop screen. The firm has also noted improvements in market sentiment, along with a recent expansion of the market's multiple, as key reasons for its increased target. 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. While we acknowledge the potential of IBM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and Disclosure: None.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Indianapolis Star
19 minutes ago
- Indianapolis Star
Indiana's betting big on data centers, but will Hoosiers end up footing the bill?
Patricia Fullen, 76, didn't turn on her air conditioning all summer. She couldn't afford the electric bill with it on. Instead, she used floor and ceiling fans to cool the house. Guests didn't want to come over because it was so stuffy. Friends made fun of her for refusing to turn it on. Fullen lives off her social security check and income from working part-time at the Jay C Store near where she lives in Georgetown, Indiana, a small town near the Kentucky border and right next to the site of Clark County's Meta data center. The data center in Clark County is one of more than 20 proposed or under construction in Indiana, drawn by the state's generous tax incentives. These hulking steel complexes process, store and disseminate data, a mission critical to support the nation's growing technological infrastructure, but they also demand more power than Indiana can provide — at least without significant, often costly, upgrades for the grid. But since the cost of grid upgrades can be passed onto residential customers, regular Hoosiers like Fullen may end up with bigger bills simply so data centers can get power — regardless of their ability to pay. 'People are going to have to make a choice,' Fullen said, 'Am I going to be able to afford to live?' The majority of planned data centers in Indiana haven't publicly released information on how much energy they expect to need, making it challenging for the public and advocates to track the total impact of these centers. Still, an IndyStar analysis, based on the information that is public, finds Indiana faces an uphill battle to connect proposed data centers to the grid. The anticipated energy needs for just nine data centers account for more than half of Indiana utilities' electricity capacity in 2023, based on data compiled by the U.S. Energy Information Administration and Citizen's Action Coalition. That percentage shrinks when considering independent power producers, which are other potential sources of electricity for data centers, but it still represents a significant portion of Indiana's capacity. Bottom line: Indiana's total electric industry capacity likely would not be enough to power the data centers on top of peak demand, according to 2021 demand data, the most recent available. 'We're talking massive, unprecedented increase in electricity consumption that we just have no recent experience with in Indiana,' said Ben Inskeep, director of the consumer advocacy organization Citizen's Action Coalition. For example, the state's most energy intensive incoming data center project, according to public data, would require one-million-homes worth of power at a whopping 2,250 MW. That center, an Amazon endeavor currently under construction in New Carlisle, would help power AI startup Anthropic. With so many unknowns, the true cost of powering data centers is a mystery even to experts in utility forecasting. Timothy Phillips, the lead analyst for Purdue's State Utility Forecasting Group, said the organization's 2023 forecast — which already projects a decline in electricity resources — did not account for data centers. The group is currently working on an updated forecast for 2025 that will include data centers, which require so much electricity that they cannot be fed into the models but instead must be added on. The little public data available, most tucked away in regulatory proceedings or utility presentations, all tell a similar story: Indiana needs to start generating more electricity if it wants to support data centers. 'But if you take the biggest numbers they were talking about, you would be talking about over 100% increase in energy required for the state,' Phillips said. Generating enough new electricity for the data centers quickly enough could be challenging. Indiana Utility Regulatory Commission proceedings are slow. But data centers can be built within a year or two, presenting a problem for utilities that need quick approvals of grid upgrades so they can quickly bring centers online. As utilities wait for approval on new power plants and transmission lines, they may prevent other large economic development projects from advancing. 'These data centers, because they are just guzzling up all of the existing infrastructure and natural resources available," Inskeep said, "it's actually creating a problem of preventing other types of economic development from coming to our state." River Ridge Commerce Center, a manufacturing and business park in Clark County, testified in IURC proceedings last year that it may have to pause efforts to attract new economic development projects because Duke Energy did not have the capacity following its contract with a Meta data center. Instead, Duke Energy told River Ridge that most current and prospective companies in the area would need to wait four to five years for grid upgrades in order to get power. Though utilities like Duke Energy may lose out on other large customers if they fail to adequately prepare, data centers offer money-making opportunities that are hard to refuse. 'For example, a utility that's making $1 billion a year in revenue, if they just add one or two data center customers they double that revenue in a short amount of time,' Inskeep said. More: AES Indiana seeks 13.5% rate hike to cover storm response, infrastructure and inflation Proponents of data centers, however, argue that attracting data centers are good for Indiana, spurring innovation and economic development. They also point out how much our daily lives have become entangled with tech, making data center expansion efforts inevitable. "Data centers make our economy and our current way of life possible," said Joseph Rompala, legislative director for Indiana Industrial Energy Consumers, Inc, which advocates for cost-effective, reliable energy for large companies. Rompala said data center companies can foster efficiency in energy storage, generation and transmission tech. Though a data center doesn't require many employees on its own, those working to manage or provide support services to the center may spark a trickle out effect, Rompala said, where businesses hire more people to serve the needs of the data center employees. Indiana's data center rush follows a long-term decline in a reliance on coal for electricity and a shift from being a net energy exporter to a net importer. In the past decade net interstate imports for electricity have risen, making up 16% of total supply in 2023. Importing energy isn't always more expensive than generating it, but it can raise rates for consumers if utilities become too reliant on purchasing electricity to feed power-hungry data centers, losing their flexibility to choose whatever option is cheapest. 'The risk is whether you can get it and how high the price is going to be, because the price can get really high,' Phillips said. The decline of coal appears to be driving the dip in electric utility supply while natural gas and renewable sources struggle to fully replace it. Instead, a new power source has taken center stage in Indiana: small modular reactors. Though no SMRs are currently operational in the U.S., these compact nuclear power plants provide up to 300 MW of electricity with a smaller carbon footprint than gas or coal. Indiana lawmakers recently passed legislation that would incentivize utilities to invest in SMRs, allowing them to recoup costs from all the customers they serve. Inskeep and experts agreed it's unlikely Indiana will run out of power; instead, Inskeep said he believes consumers will end up paying the bulk of the cost for supplying data centers power. 'It's really unfair that people right now that can't afford to keep their homes and can't afford to pay their power bills, are now having increases on our bills in order to subsidize these data centers and the infrastructure they need to connect to the grid,' Inskeep said. Residents are starting to push back against data centers coming to their own counties. In March, the Valparaiso mayor announced the city would stop exploring plans to allow a data center to purchase land after public outcry. In May, pushback among residents in Hancock County led a developer to withdraw a project that may have potentially housed a data center, though the developer plans to resubmit a zoning request. Harvard electricity law fellow Eliza Martin, who coauthored a paper on the ways ratepayers are subsidizing data centers, said it's profitable for utilities to supply energy for data center customers because they need so much electricity. But huge investments can pose a risk for other ratepayers if data center deals fall through, Martin said. 'Indiana will have built all of this generation and all of this new infrastructure, and then you won't have the same customers to spread those costs about,' she said. More: A massive data center is planned for Franklin Township, but many residents are concerned Another emerging solution involves creating special requirements for large data centers in order to protect consumers. In February, the IURC approved a settlement between data center companies and Indiana Michigan Power that would reduce the risk of costs being passed to ratepayers by having companies enter into long-term financial commitments. But the settlement only applies to I&M, which is only one of five investor-owned utilities in Indiana. Until more progress can be made, Hoosiers like Patricia Fullen will plan to keep the AC off again this summer. The cost of essentials like food, gas and medicine is just too much, she said — she can no longer afford to be cool.
Axios
28 minutes ago
- Axios
Exclusive: Thune urges "light touch" on AI regulations
Senate Majority Leader John Thune expects some form of freeze on state AI regulations to remain in the "big, beautiful bill" — even as his Republicans keep debating the move. Why it matters: States are leading the way in passing and implementing AI guardrails while Congress lags behind, and consumers say they want regulation. The moratorium has been criticized but Thune's (R-S.D.) support for it falls in line with the number one priority among many Republicans in Washington: don't get in the way of innovation. The big picture: "We want to be the leaders in AI and quantum and all these new technologies. And the way to do that is not to come in with a heavy hand of government, it's to come in with a light touch," Thune said. As former chair of the Senate Commerce committee, it's a space he knows well. The "big, beautiful bill" makes broadband grants contingent on states not pursuing AI regulations for the next 10 years. "I think there'll be some version of it in the bill, but... it's possible, based on kind of the feedback we're getting from members, that it might change in some way," he said. Zoom in: Asked how Congress can know what policies will work 10 years down the line with a technology evolving as quickly as AI, Thune responded frankly, "I don't think you can." "I think this is the kind of thing where you can put some basic sort of parameters in place, but you're going to have to come along and be able to tweak those in the future, too," he said. Asked if the temporary ban on state AI regulations could tie the hands of states for the next decade, Thune responded, "that's the question, I think, that everybody's trying to answer." The way it's written now would derail a host of bills across the country addressing everything from deceptive election materials to autonomous vehicles. Behind the scenes: Sens. Marsha Blackburn (R-Tenn.) and Ted Cruz (R-Texas) had a heated debate over the issue during a closed-door meeting Monday night, as Axios reported. Asked about Blackburn's pushback on Tuesday, Cruz told Axios: "The provision is in the bill, and it's going to remain in the bill." The policy has already undergone a rebrand, being framed as a "temporary pause" instead of a "moratorium." It has received the green light from the Senate parliamentarian after Cruz tweaked it slightly, but is still facing fierce opposition on and off the Hill, ranging from populist Republican leaders like Steve Bannon to civil-rights advocates. "I'm willing to take this up on the floor if need be, and hopefully we can address it before then," Sen. Josh Hawley said Tuesday. "I think it's terrible policy. It's a huge giveaway to some of the worst corporate actors out there." Friction point: Cruz, chair of the Commerce committee, which has key jurisdiction on AI issues, has said he's only interested in light-touch regulation for AI. And Congress has shown it can't figure tech regulation out: "The challenge all of the states have is that getting anything through Congress in a reasonable length of time has become extremely difficult, right?" Sen. Mike Rounds, who was a key part of the bipartisan AI workshops last year, told Axios. "But the long term development of AI will require that we have a consistent policy throughout the United States." What to watch: Thune has worked on a bipartisan AI bill with Sen. Amy Klobuchar (D-Minn.) in the past, and told Axios that "at some point, I'm hoping we will legislate on this issue."
Washington Post
31 minutes ago
- Washington Post
How much will you save or lose with Trump's ‘big' tax bill?
How much will you save or lose with Trump's 'big' tax bill? President Donald Trump and Republicans in Congress are on the cusp of passing legislation to make permanent trillions of dollars of tax cuts enacted in 2017. Besides extending those tax cuts, which disproportionately benefit high earners, the measure also would reduce spending on safety net programs, which benefit low-income households. All told, the measure would mark a significant shift in federal benefits from low-income to high-income households, according to the nonpartisan Congressional Budget Office and other independent analyses. See how your finances — and those of other Americans — would change using this calculator, which was developed in partnership with Penn Wharton Budget Model. The calculator shows the estimated effects of the House-passed bill compared with the 2024 tax year. Story continues below advertisement Advertisement Pick a profile ... or enter your info We will not store your income or personal data. Unmarried, 2 kids, $20K Married, 2 kids, $60K Married, 3 kids, $110K Married, no kids, $450K Senior, $90K Your profile Meet Tara She makes $20,000 per year and has two kids. She files as single, and her whole family uses SNAP and Medicaid benefits. Because of benefit cuts in the bill, she would be about $870 worse off than last year. HOUSEHOLD FINANCES Annual income $20,000 Household size 3 people Location California Government benefits Medicaid and SNAP Effects of the tax bill Tax changes $751 Benefits/policy change -$1,621 TOTAL CHANGE -$870 Key changes for Tara Cuts to Medicaid and SNAP could hurt low-income earners Families with low incomes, especially those that rely on SNAP and Medicaid, would have their finances hit hard. Republicans have proposed deep cuts to social safety net programs to try to reduce the bill's effect on the national debt. The plans to cut Medicaid could lead to 16 million people losing health care coverage over 10 years, according to the Congressional Budget Office. It would also add new qualification and cost-sharing requirements, including co-pays for beneficiaries above 100 percent of the federal poverty level and work requirements for some adults. The bill would cap the expansion of future SNAP benefits and pass more of the cost to state governments. States could be forced to either find room in their budgets to keep funding the program at its current levels, or cut benefits. How the tax bill affects Tara compared to others +0 +10k +20k +30k $500K+ $450-499K $400-449K $350-399K $300-349K $250-299K $200-249K $180-199K $160-179K $140-159K $120-139K $100-119K $80-99K $60-79K $40-59K $20-39K $0-19K Household income Total change 20th percentile 80th percentile Median $23,093 Read another profile Unmarried, 2 kids, $20K Married, 2 kids, $60K Married, 3 kids, $110K Married, no kids, $450K Senior, $90K Your profile Story continues below advertisement Advertisement Other key bill impacts The One Big Beautiful Bill extends tax cuts from Trump's first term, implements new campaign proposals — including no taxes on tips and overtime wages — and seeks to offset the cost with large cuts to Medicaid and SNAP, the Supplemental Nutrition Assistance Program formerly known as food stamps. 'The bill creates a fair amount of new debt, and somebody has to pay for that. It's not true that everybody's going to be a winner from it,' said Kent Smetters, faculty director of the Penn Wharton Budget Model, which built a model for The Washington Post that shows how people's financial outcomes would be better or worse under the bill. The legislation is expected to help many middle- and high-income earners, but it could deal a blow to low-income earners, especially those who rely on Medicaid and SNAP. Republicans have argued that the bill will usher in a broad economic boom, while Democrats have expressed concern that the legislation would add trillions to the already high national debt. No taxes on tips and overtime One of Trump's campaign pledges, this provision would exempt overtime wages from taxes through a new deduction. The legislation wouldn't allow 'highly compensated employees,' or people without a Social Security number to claim the deduction. Trump also campaigned on ending taxes on tips. The legislation would allow a deduction for the total amount of tipped income received. It contains some guardrails to prevent 'highly compensated employees' from claiming their earnings as tips and specifically identifies food service, hair care, nail care, aesthetics, and body and spa treatments as applicable professions that would be eligible for the deduction. Boost to child tax credit The bill includes a temporary $500 increase in the child tax credit, bringing it to $2,500 through 2028. It would then return to $2,000 and increase to account for inflation. The legislation limits eligibility to parents or guardians with Social Security numbers. A deduction for seniors The bill adds $4,000 to the standard deduction for taxpayers 65 or older, giving a financial boost to many seniors. The policy would be in place for four years and taper off as a recipient's income increases. Trump originally pledged to end taxes on Social Security benefits, which the bill did not include. High income-earners benefit from many parts of the bill High-income earners are among the biggest winners of the One Big Beautiful Bill Act. The measure extends the tax cuts enacted in 2017 and includes several provisions that benefit wealthy Americans, such as expanding the estate tax exemption, extending a tax cut for the highest income bracket and increasing a deduction for certain 'pass-through' business entities. Specific provisions, such as the expanded child tax credit and a higher cap on the state and local tax deduction, or SALT, also benefit those with higher incomes. House Republicans rejected a push to raise taxes on top earners, which Trump and some allies had suggested. SALT deduction One of the biggest issues dividing lawmakers during negotiations has been the cap on the state and local tax deduction, or SALT, which allows itemizing filers to write off what they paid in local taxes from their federal tax return. The legislation raises the cap from $10,000 to $40,000 for taxpayers earning up to $500,000. Story continues below advertisement Advertisement
