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IBM is focused on artificial intelligence (AI) solutions for its enterprise clients that solve real problems.
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Intel still has a shot at manufacturing AI chips with its upcoming Intel 14A process.
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Both stocks could be big AI winners.
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10 stocks we like better than International Business Machines ›
The artificial intelligence (AI) industry is evolving rapidly. AI is getting smarter, although some cracks in the growth story have emerged. OpenAI's highly anticipated GPT-5 model has fallen well short of inflated expectations, which likely throws some cold water on the idea that AI "superintelligence" is right around the corner.
While uncertainty is running high, International Business Machines (NYSE: IBM) and Intel (NASDAQ: INTC) are two AI stocks worth buying if you have $1,000 available to invest. IBM is focusing on applying AI to real-world problems for its clients, and Intel could find itself manufacturing future AI chips for third-party customers if it can get its act together.
Here's why IBM and Intel both look like solid AI bets.
Right now, companies like Nvidia that supply the powerful GPUs that make the AI boom possible are raking in most of the cash. In the long run, though, companies that take AI technology and provide high-value services will likely be the big winners. IBM is already doing exactly that.
An astonishing 95% of AI pilots at companies fail to produce results, according to an MIT report. With many businesses struggling to implement AI in a way that actually increases revenue or reduces costs, IBM already offers a solution. The company's generative AI business has drummed up $7.5 billion worth of business so far, with most of that total coming from its consulting arm. AI implementation and integration services are proving to be critical pieces of the puzzle for enterprises.
As companies shift from frantically deploying AI to really thinking about returns on investment and real-world results, IBM is in a great position to grow its generative AI business. With the global economic environment growing more uncertain, AI projects that promise reduced costs and greater efficiency should be in high demand.
That's exactly what IBM supplies. By pairing consulting with software, IBM has found a lucrative AI niche that can drive growth for years to come.
There's no question that Intel has largely failed to take advantage of the AI boom so far. The company's AI accelerator efforts have been a disaster, with its Gaudi AI chips selling poorly and its next-generation Falcon Shores cancelled. New CEO Lip-Bu Tan has noted that it may be too late for Intel to succeed in the AI training market, which is dominated by Nvidia.