Highlighting recent FGCU Eagle Fund purchase International Business Machines (IBM)

IBM shares are rising afterhours on better than expected results and future guidance driven by its Artificial Intelligence product and service offerings, which we highlighted in our recent research report. Congrats to student Analysts Nick Malik, Josh Woodruff, and Chelsie Belland on their excellent work.

Excerpts from our student's report

"We recommend the purchase of IBM shares due to its compelling valuation, its underappreciated exposure to the ongoing Artificial Intelligence (AI) spending ‘super cycle’, and numerous profitability enhancing restructuring initiatives underway at the company"

"We see a parallel between today’s AI spending boom and powerful internet spending cycle of the mid to late -1990s, which proved to be a boon for IBM’s services unit (and its stock price)"

"Additional upside to our price objective is possible if IBM can capitalize on the ongoing Artificial Intelligence (AI) spending boom. In the mid - late 1990s, IBM PE traded over 30x earnings when its revenue growth accelerated due to its Y2K remediation and Internet consulting work."

There has been a lot of money spent on AI hardware (e.g. Nvidia GPUs)... now these systems need to be deployed, integrated and most importantly monetized for the AI cycle to be sustained. So while the early part of the cycle has almost exclusively benefitted the AI hardware focused companies, we think now may be the time to start to look at some mid-cycle software and services plays like IBM.

NOTE - THIS IS NOT AN INVESTMENT RECOMMENDATION, but rather an example of the type of work FGCU's Student Managed Investment Fund "Eagle Fund" students are doing.

For more info on FGCU's Eagle Fund visit https://www.fgcu.edu/cob/programs/fin-econ/eaglefund/