The ‘Magnificent 7’ stocks (Apple, Amazon, Alphabet, Nvidia, Microsoft, Meta Platforms, and Tesla) continue to be popular investments. And for good reason – they’re all amazing businesses with significant long-term growth potential.

However, there’s an old-school tech stock that has outperformed all of these shares in 2025 and that’s good ol’ IBM (NYSE: IBM). This year, it’s up more than 30%.

So, what’s going on here? And is the stock worth considering today?

An AI play

There are a number of reasons IBM shares are on fire at the moment.

One is that the company is now being recognised as a key player in the artificial intelligence (AI) space. Back in January, the company beat FY25 Q4 estimates thanks to strong spending on AI-related cloud infrastructure and software. More recently, in April, it told investors that it had built up a $6bn generative AI book of business. This was up $1bn on the previous quarter, fuelled by increasing adoption of its range of AI offerings.

Now, I’m not surprised that IBM is having success on the AI front. I actually highlighted this company as an AI play back in early 2023. At the time, I noted that it had just acquired a number of AI businesses including Databand.ai, Turbonomic, and WDG Automation. I just wish I’d bought the stock back then – it has more than doubled in price since that coverage.

Exposure to quantum computing

IBM shares are also seeing interest due to the company’s exposure to quantum computing. This is an emerging field of technology that harnesses the capabilities of quantum mechanics to solve problems far beyond the ability of regular computers.

In June, the company said that it plans to have a large-scale, practical quantum computer (named ‘Starling’) by 2029. And it laid out detailed steps it will take to get there. This is certainly an exciting development. However, it should be noted that quantum computing is still in its infancy and there are no guarantees that it will become a mainstream technology in the future.

Worth a look today?

Are IBM shares worth considering today near the $290 mark? Potentially. But I think it could be sensible to wait for a bit of a pullback if one is keen to invest in the company.

At present, analysts are forecasting earnings per share of $10.90 this year. So right now, the price-to-earnings (P/E) ratio is about 27.

That’s quite a high multiple relative to the level of growth being generated. While revenue growth is picking up, it’s still only expected to be around 5% this year.

Note that many of the Mag 7 stocks are generating stronger revenue growth. For example, Microsoft is expected to generate top-line growth of about 14% this financial year.

Looking beyond the valuation, another risk is competition from rivals. AI and quantum computing are competitive industries and IBM is up against some powerful players.

Given the risks, I’ll personally be keeping the stock on my watchlist for now. But I do think it has potential.