We recently published a list of 10 Best Stocks to Buy and Hold for 20 Years. In this article, we are going to take a look at where International Business Machines Corporation (NYSE:IBM) stands against other best stocks to buy and hold for 20 years.
As per Ameriprise Financials, the initial months of 2025 were tough for investors. This is because leading US stock indexes ended the first quarter meaningfully lower, countering the investor projections that stocks will continue to move northwards after the 2 strong years of returns. Notably, the tariff uncertainty has impacted the markets this year, while recession odds are increasing, and global trade frictions continue to increase. Since major market areas have corrected from the recent highs, and the outlook has become guarded, the investment firm believes that maintaining a balanced perspective of current conditions remains important during periods of market stress.
What Lies Ahead in Q2 2025?
Ameriprise Financial opines that Q2 2025 is expected to bring as much uncertainty and volatility for investors as Q1 2025. That being said, the investment firm believes that the bullish case for stocks is expected to prevail long term, considering the current firm US economic and profit conditions. However, the threat of Trump’s tariff policies and the possible retaliatory tariffs can change the broader market dynamics.
Nevertheless, the investors should not deviate from the well-diversified portfolio. As per Ameriprise Financial, the investors are required to focus on holding high-quality assets throughout their portfolio, make sure that their allocations are in line with their risk tolerance, and that they take a longer-term view of the current market stress, which, historically, can result in opportunities to dollar-cost average in the high-quality assets.
As per Ameriprise Financial, if a recession is avoided, considering the recent tariff dynamics, the current stock levels can provide attractive entry points for investors who plan to dollar-cost average in the volatility. Furthermore, the US economy and S&P 500 Index corporate profits are projected to grow, says the firm. While it remains difficult to project where the economy and corporate profits can move over the near-to-intermediate term as a result of current tariff policies, the US economy and corporate earnings are expected to remain positive in H1 2025, says Ameriprise Financial.
The corporate profit margins are at strong levels relative to history, which can support companies in navigating tariff worries and stabilize demand and profits, especially if these tariff impacts are temporary. On average, when the sentiment is significantly weak and there is increased uncertainty about policy, some clarity emerges. And with this, the stock performance tends to improve over the upcoming 6 to 12 months, says the investment management firm.
Our Methodology
To list the 10 Best Stocks to Buy and Hold for 20 Years, we sifted through several financial media reports to choose well-established and stable companies. After getting an extended list of the stocks, we shortlisted the ones that were the most popular among hedge funds, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is International Business Machines Corporation (IBM) the Best Stock to Buy and Hold for 20 Years?
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International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 60
International Business Machines Corporation (NYSE:IBM) provides integrated solutions and services. Wamsi Mohan, an analyst at Bank of America Securities, reiterated a “Buy” rating on the company’s stock, retaining a price objective of $270.00. The analyst’s rating is backed by a combination of factors demonstrating International Business Machines Corporation (NYSE:IBM)’s resilience and growth potential in the tough macroeconomic environment. The analyst highlighted the company’s recurring revenue streams and the mission-critical nature of workloads, offering a buffer against the broader economic fluctuations. Overall, International Business Machines Corporation (NYSE:IBM)’s defensive portfolio, turnaround efforts as well as dividend yield support the analyst’s rating.
Over the next 20 years or so, the company’s growth is expected to be driven by the burgeoning AI market. International Business Machines Corporation (NYSE:IBM)’s extensive enterprise customer base offers a strong opportunity for AI monetization. Organic product innovation, together with strategic acquisitions, improves the company’s ability to provide cutting-edge AI solutions. With businesses adopting AI technologies, the company’s expertise can fuel significant growth and market share gains. Over the long term, the company’s competitive advantages, stemming from its switching costs and intangible assets, are expected to drive growth. Elsewhere, Stifel Nicolaus analyst David Grossman maintained a “Buy” rating on International Business Machines Corporation (NYSE:IBM)’s stock, setting a price objective of $290.00.
Overall, IBM ranks 10th on our list of best stocks to buy and hold for 20 years. While we acknowledge the potential of IBM as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than IBM but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
