NEW YORK (CNN/Money) - IBM's first-quarter report Thursday should provide investors the most accurate glimpse into how corporate demand worldwide for tech products and services is shaping up.

And it's not just because IBM has its Big Blue claws in all the major subsectors of tech. It's because nearly 60 percent of IBM's sales come from outside the United States.

"If you're going to only own one stock that represents all of information technology spending, it's pretty much IBM," said Kimberly Caughey, an analyst with Parker/Hunter. She doesn't own the stock and her firm has no investment banking relationship with IBM.

Weak green benefits Big Blue IBM's sales growth last year looks less impressive after factoring out favorable exchange rates.   YOY rev. gr. (as reported)  YOY rev. gr. (excluding currency effects)  Q1  11%  4%  Q2  10%  3%  Q3  9%  4%  Q4  9%  1%   Source:  Company reports

Overall, analysts are expecting healthy sales growth for the quarter -- 9 percent, to $21.9 billion. But investors need to distinguish between real growth from an increase in demand and growth from currency gains.

IBM (IBM: Research, Estimates), like other large multinational companies, has benefited from stronger currencies abroad since the value of goods and services sold outside the U.S. is inflated when converted back into dollars.

During the fourth quarter of 2003, for example, IBM reported 9 percent sales growth. But after adjusting for currency fluctuations, growth was only 1 percent.

"Investors need to look at revenue growth excluding the effects of currency," said Adam Adelman, senior technology analyst with Philippe Investment Management, which owns shares of IBM. "On that measure, I don't expect IBM to have significant top line growth this quarter."

As for first-quarter earnings, Wall Street is predicting growth of 18 percent from the same period last year, to 93 cents a share. But Caughey said it would not be surprising if IBM beat this estimate, thanks to strength in the company's software business, which has the highest profit margins of all of IBM's divisions.

Caughey thinks IBM also could come in a little higher on sales. Her estimate is for $22 billion, a 10 percent increase from the first quarter of 2003. As for the currency issue, she said that as long as sales, excluding the effects of exchange rates, are higher than a year ago, that would be a good sign. "It's important to not see a decline in growth," said Caughey.

Specifically, Caughey expects IBM's software and hardware businesses (which sells PCs, servers and storage devices) should post double-digit sales gains, which could help to offset a slower level of growth in IBM's global services division, which includes outsourcing and consulting.

There have been some concerns lately about pricing pressures in the tech-services business as competitors such as Hewlett-Packard (HPQ: Research, Estimates) and Accenture (ACN: Research, Estimates) step up their efforts to beat out IBM for new contracts. The services division also features relatively high profit margins so weakness there could be a drag on earnings. Services accounted for 44 percent of total revenues in the fourth quarter.

Looking ahead, investors continue to wait for strong evidence of a corporate spending recovery to justify last year's tech stock runup. Shares of IBM, like many other large techs, have been stuck in a fairly narrow range for the past few months.

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And even though semiconductor leader Intel's (INTC: Research, Estimates) management sounded optimistic when the company reported its first-quarter results Tuesday, the company's sales were below expectations and guidance for the second quarter was uninspiring.

So a boost to IBM's sales guidance could be a big shot in the arm for IBM and the entire tech sector. Analysts are predicting that IBM's second quarter sales will come in at $23.2 billion, a 7 percent increase from last year's second quarter.

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Ted Parrish, co-manager of the Henssler Equity fund, which owns IBM, said there's a good chance IBM will deliver an improving sales outlook since it is more diversified than other tech companies.

"The environment is a lot healthier, especially for hardware spending. And that trickles over into software and services, said Parrish.

He also thinks that as the year progresses, the company's sales growth will reflect greater demand and not just favorable currency comparisons.