IBM posted its biggest intraday gain in more than 20 years. Although the company expects to cut jobs, it gave optimistic forecasts for revenue and cash flow through 2024. The company said in a statement Wednesday that it expects free cash flow for the year ending in December to be about $12 billion. Analysts on average expected $10.9 billion, according to data compiled by Bloomberg. The company also said revenue will grow by "mid-single digits." Analysts expected sales growth of about 3%.
IBM has focused on streamlining software and services-related businesses in recent years, divesting management infrastructure, weather and health businesses. The Armonk, N.Y.-based company said it would also cut jobs in the low single digits this year. The company has also launched new products to cater to growing interest in artificial intelligence.
The stock rose as much as 13% to $196.90 in New York on Thursday, its biggest intraday gain since January 2001 and its highest price since June 2013.
Evercore ISI analyst Amit Daryanani highlighted IBM's higher-than-expected full-year guidance, saying "Big Blue is back." "Our sense is that IBM remains an underappreciated beneficiary of AI and should continue to perform better in the coming years."