Business services providers thrive by solving complex operational challenges for their clients, allowing them to focus on their secret sauce. Still, investors are uneasy as firms face challenges from AI-driven disruptors and tightening corporate budgets.
These doubts have caused the industry to lag recently as services stocks have collectively shed 3.5% over the past six months. This drop was discouraging since the S&P 500 held steady.
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Kyndryl (NYSE:KD) and the rest of the it services & consulting stocks fared in Q1.
AI Revolution taking off in Saudi Arabia, creating major opportunities for US tech stocks. Trump's visit & trade deal with China add to bullish outlook.
IBM's enterprise-focused AI strategy, leveraging watsonx and agent capabilities, aims to drive significant growth, building upon its foundational stability.
IT infrastructure services provider Kyndryl (NYSE:KD) reported revenue ahead of Wall Street’s expectations in Q1 CY2025, but sales fell by 1.3% year on year to $3.8 billion. Guidance for next quarter’s revenue was better than expected at $3.78 billion at the midpoint, 0.6% above analysts’ estimates. Its non-GAAP profit of $0.52 per share was 2.7% above analysts’ consensus estimates.
IBM's Think 2025 event focused on its portfolio of AI solutions for large enterprises. Analyst James Schneider maintains a Buy rating and $270 price target.
IBM stock is up 48% in the past year and 13% this year, with a bullish MACD and RSI. Analysts are impressed by its AI and hybrid cloud strategy, with a $300 price target and $5B tied to its AI business.
