Artificial Intelligence is revolutionizing many industries with its significant potential, continuously expanding applications and unmatchable growth prospects. Major tech companies are leveraging the technology in their favor and driving the technology revolution.
Considering the industry’s growth prospects, investors could buy fundamentally sound tech stocks: International Business Machines Corporation (IBM), Adobe Inc. (ADBE), and UiPath Inc. (PATH), which are driving the AI revolution.
Artificial Intelligence is the front-runner of various significant innovations around the world right now. Technology has touched almost every field and aspect of life, from our mobile phones to healthcare services; everything has some glimpse of AI technology.
This is because of the sophistication, ease, cost-effectiveness, and efficiency offered by AI, and all major companies are hopping on the trend and aggressively investing and researching AI’s potential. This has resulted in a consistent rise in worldwide IT spending. Gartner forecasts global IT spending to grow by 9.8% in 2025 to reach around $5.62 trillion.
The surge in IT spending is driven by segments like data center systems, devices and software, and generative AI (GenAI), which are likely to see double-digit growth in 2025.
Megacap tech companies like Meta, Alphabet, Amazon, and Microsoft are pouring millions and billions to strengthen their competitive edge in the market. As per estimates, these companies intend to invest as much as $320 billion in 2025 into AI technologies.
Statista projects the worldwide Artificial Intelligence market to expand at a noteworthy CAGR of 27. 7% until 2030. Further, in terms of global comparison, the United States is expected to emerge as the largest market.
Given the industry’s robust outlook, investing in fundamentally strong tech stocks IBM, ADBE, and PATH could be wise.
Let’s discuss the fundamentals of these stocks in detail:
International Business Machines Corporation (IBM)
IBM is a global provider of integrated solutions and services. The company operates in Software; Consulting; Infrastructure; and Financing segments. The company offers a hybrid cloud and AI platform that enables clients to realize their digital and AI transformations across the applications, data, and environments in which they operate.
On February 25, 2025, IBM announced its intention to acquire DataStax, an AI and data solution provider. DataStax’s innovative technology will enhance IBM’s Watsonx portfolio of products, accelerating the use of generative AI and helping organizations unlock value from vast amounts of unstructured data.
The strategic acquisition reinforces IBM’s commitment to open-source innovation and will help clients access untapped, unstructured enterprise data to fully utilize generative AI.
On the same date, IBM announced a new agreement with Riyadh Air to integrate Watsonx, IBM’s portfolio of AI products, and IBM Consulting AI solutions to establish an enterprise-wide AI capability to elevate Riyadh Air guest and employee experiences. The collaboration aims to help power the Saudi Arabian airline’s mission to launch flights in 2025 and offer an elevated guest experience.
In the fourth quarter that ended December 31, 2024, IBM’s total revenue increased 1% year-over-year to $17.55 billion. Its gross profit grew 1.7% year-over-year to $10.44 billion. The company’s adjusted EBITDA of $5.60 billion reflects 1.8% growth from the prior year’s quarter.
In addition, the company’s non-GAAP net income and EPS came in at $3.70 billion and $3.92 for the quarter, respectively.
Street expects IBM’s revenue to increase 3% year-over-year to $16.24 billion for the second quarter ending June 2025. The company’s EPS is expected to grow 8.3% year-over-year to $2.63 for the same period. Moreover, IBM topped the consensus EPS estimates in all four trailing quarters.
IBM’s stock gained 30.2% over the past six months and 40% over the past year to close the last trading session at $257.75.
IBM’s bright outlook is reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has a B grade for Quality and Momentum. IBM is ranked #30 out of 77 stocks in the B-rated Technology – Services industry.
Click here to access additional IBM ratings for Stability, Sentiment, Growth, and Value.
Adobe Inc. (ADBE)
ADBE operates as a technology company. The company operates in three major segments: Digital Media; Digital Experience; and Publishing and Advertising. The company’s flagship product is Creative Cloud, a subscription service that provides creative products and applications (apps) integrated with cloud-delivered services across various surfaces and platforms.
On February 25, 2025, ADBE expanded its web experience and introduced Photoshop on iPhone. It will be launching Photoshop on Android later this year. Photoshop’s iconic image editing and design capabilities will be accessible and more intuitive, offering free and premium offerings and a mobile-friendly design for artists.
The new mobile and web apps will empower creators and offer accessible and intuitive interfaces that makes it easy to design and edit stunning visuals
On February 20, 2025, ADBE launched real-time CDP collaboration in the U.S., a new offering that allows advertisers and publishers to tackle a changing advertising landscape. Adobe real-time CDP collaboration delivers a secure environment for advertisers and publishers to discover, activate, and measure high-value audiences through consent-driven first-party data.
For the fourth quarter that ended November 29, 2024, ADBE’s total revenue grew 11.1% year-over-year to $5.61 billion. Its gross profit increased 13% from the year-ago value to $4.99 billion. The company’s non-GAAP operating income was $2.60 billion, representing an improvement of 10.8% from the prior year’s quarter.
Also, the company’s non-GAAP net income came in at $2.13 billion and $4.81 per share, up 8.8% and 12.6% from the previous year period, respectively.
For the fiscal year 2025, ADBE targets total revenue of $23.30 billion – $23.55 billion. Its Digital Media segment revenue is expected to be $17.25 billion to $17.40 billion, and its Digital Experience segment revenue is projected to be between $5.80 billion and $5.90 billion. Also, its non-GAAP EPS is set at $20.20 to $20.50.
Analysts expect ADBE’s EPS and revenue for the first quarter (ended February 2025) to increase 11% and 9.3% year-over-year to $4.97 and $5.66 billion, respectively. Also, the company topped the consensus revenue and EPS estimates in all of the trailing four quarters, which is impressive.
Shares of ADBE have gained 0.9% over the past month to close the last trading session at $443.41.
ADBE’s POWR Ratings reflect its promising prospects. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
The stock has an A grade for Quality and a B grade for Growth. ADBE is ranked #10 out of 127 stocks in the Software – Application industry.
To access additional ADBE ratings for Stability, Value, Sentiment, and Momentum, click here.
UiPath Inc. (PATH)
PATH provides an end-to-end automation platform that offers a range of robotic process automation (RPA) solutions internationally. The company provides a suite of interrelated software to build, manage, run, engage, measure, and govern automation within the organization.
On October 23, 2024, PATH announced the transformation of operations for Omega Healthcare Investors, Inc. (OHI), a global leader in revenue cycle management, healthcare, and clinical enablement services, with AI-powered automation. The collaboration enabled Omega to utilize the full power of automation, AI, and generative AI to deliver better outcomes for its customers.
On October 22, 2024, PATH integrated Anthropic’s large language model (LLM), Claude 3.5 Sonnet, to deliver AI features in three key products, including UiPath Autopilot for everyone, Clipboard AI, and a medical record summarization solution. UiPath’s platform and Claude’s advanced, trusted, and responsible AI capabilities allow greater accuracy to businesses.
On the same date, the company announced a strategic partnership with Inflection AI to integrate the UiPath Platform with the new Inflection for Enterprise solution, enabling enterprises to achieve higher operational efficiency and effectiveness levels without compromising trust and AI security options.
For the third quarter that ended October 31, 2024, PATH’s total revenue increased 8.8% year-over-year to $354.65 million. The company’s non-GAAP gross profit grew 5.8% from the year-ago value to $300.36 million. Also, its non-GAAP operating income of $49.72 million, reflecting growth of 13.8% over the prior year’s quarter.
In addition, the company’s non-GAAP net income stood at $59.81 million, or $0.11 per share for the quarter, respectively.
Analysts expect PATH’s revenue and EPS for the second quarter (ending July 2025) to increase 12.3% and 67.7% year-over-year to $355.23 million and $0.07, respectively. Further, the company has surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.
PATH’s shares have surged 1.8% over the past six months to close the last trading session at $12.63.
PATH’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
The stock has a B grade for Value, Growth, and Quality. Within the A-rated Software – SAAS industry, PATH is ranked #7 of 18 stocks.
In addition to the POWR Ratings I’ve just highlighted, you can see PATH’s ratings for Stability, Sentiment, and Momentum here.
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IBM shares were trading at $256.43 per share on Wednesday afternoon, down $1.32 (-0.51%). Year-to-date, IBM has gained 17.43%, versus a 1.33% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions. More…
