IBM soared to ten-year highs on Thursday morning on the New York Stock Exchange, after unveiling solid quarterly results and a much better-than-expected outlook.

At around 11:00 a.m., the American IT group's share price jumped over 12%, posting by far the strongest advance on the Dow Jones and closing in on its all-time highs set in early 2013.

IBM last night reported net operating profit (non-GAAP) up 9% to $3.6 billion for the fourth quarter of 2023, or $3.87 per share (+8%).

The digital services giant's sales rose by 4% to $17.4 billion on a reported basis, and by 3% at constant exchange rates, with growth driven in particular by the consulting segment (+5%).

'Customer demand for AI is accelerating, and our backlog for watsonx and generative AI almost doubled between Q3 and Q4', highlights CEO Arvind Krishna.

Following this strong performance, the company has set itself the target of generating free cash flow (FCF) of around $12 billion in 2024.

'This is well above our previous forecast of $11 to $11.5 billion', react Bank of America analysts this morning.

In a research note, BofA now says it expects two years of strong growth for 'Big Blue', with free cash flow expected to reach $13 billion in 2025.

The financial intermediary reiterates its buy recommendation on the stock, with a price target raised from $170 to $200, praising the group's continued successful "turnaround", its defensive business portfolio, its attractive dividend yield and its underestimated expertise in AI.

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