IBM

With other tech giants sparring over consumer chatbots, IBM (IBM 1.22%) is quietly positioning itself to dominate a different artificial intelligence (AI) battlefield: the enterprise segment.

The centennial tech titan might seem like an unlikely AI winner, but there’s one key factor that could make IBM the surprise star of the artificial intelligence revolution. IBM’s AI solutions are tailor-made for large corporations.

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IBM’s secret weapon: Enterprise-class AI

The watsonx platform for generative AI services isn’t trying to write your poetry or plan your vacation. Instead, it’s helping Fortune 500 companies deploy AI with strict attention to data security and regulatory requirements. Combined with Red Hat’s OpenShift platform — IBM’s $34 billion acquisition from 2019 that’s now paying proverbial dividends — the company offers something unique: AI that works within existing enterprise infrastructure.

This isn’t just theory. Banks are using IBM’s watsonx to detect fraud while maintaining compliance with financial regulations. Healthcare systems are deploying IBM’s AI to analyze patient data without violating patient privacy regulations.

It’s all done with auditable data flows. Sure, watsonx will hallucinate from time to time, like any other system based on large language models (LLMs). But when it does, you’ll be able to trace the error back to its original inspiration.

Meanwhile, IBM’s consulting arm helps these enterprises make use of AI solutions. This unique focus on support services creates sticky, long-term business relationships.

The big blue numbers tell the story

IBM’s AI-based Automation segment grew 14% year over year in Q2 2025, while Red Hat revenue continues its double-digit revenue expansion. The enterprise AI market is projected to reach $600 billion by 2028, and IBM is uniquely positioned to capture this opportunity.

Unlike consumer AI companies burning cash on compute costs, IBM’s enterprise focus means higher margins and predictable revenue streams. While others chase the next viral chatbot, IBM is selling the picks and shovels of the enterprise AI gold rush — and that’s exactly why it will thrive. Buying IBM stock today should set you up for robust AI-boom gains.

Quantum computing is a hot area of the tech field these days, and thanks to that, International Business Machines (IBM 5.31%) stock was popular on Thursday.

A convincing demonstration of its prowess in this technology wowed investors, who collectively pushed the company’s share price up by over 5% that day. Speaking of convincing, that performance crushed the S&P 500 (^GSPC -0.50%); this slid by 0.5%.

Quantum leap

The demonstrator was global bank HSBC. Before market open, the company announced it successfully ran a trial of algorithmic bond trading analysis, using a combination of traditional and quantum computing resources. IBM team members handled the technical aspects of the test.

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HSBC said that the trial indicated that this combination delivered as much as a 34% improvement over classical prediction techniques in predicting key information about a bond trade — specifically, how high the possibility was that it would be filled at a quoted price.

In HSBC’s press release on the trial, the bank quoted vice president of IBM’s quantum unit Jay Gambetta as saying that it “shows what becomes possible when deep domain expertise is integrated with cutting-edge algorithm research, and the strengths of classical approaches are combined with the rich computational space offered by quantum computers.”

Clients with deep pockets

It was clever of IBM to get involved in HSBC’s effort to ramp up the technological foundation of an important securities trading activity. The tech company has clearly demonstrated that it can be a go-to partner for such well-capitalized clients, in a hotly competitive field where the stakes are high.

IBM isn’t necessarily a top choice for investors seeking to capitalize on quantum computing, but perhaps this piece of news will help move that needle.