International Business Machines (IBM 0.22%) released its fourth-quarter results after the close of trading Wednesday, delivering numbers for the period that beat analysts' estimates. Management also provided an optimistic outlook for revenue and cash flow in 2024. In response, investors cheered, sending shares of IBM more than higher 10% as of 10 a.m. ET Thursday.

2023 ended strong, and 2024 looks even better

IBM is one of the original tech giants, and the company in recent years has evolved toward a focus on providing software and services to large corporate customers. The strategy paid off in the most recent quarter.

IBM earned $3.87 per share in Q4 on revenue of $17.4 billion, beating the consensus estimates of $3.78 per share on revenue of $17.3 billion. Revenue was up 4% year over year, led by 6% consulting revenue growth.

"In the fourth quarter, we grew revenue in all of our segments, driven by continued adoption of our hybrid cloud and AI offerings," CEO Arvind Krishna said in a statement. "Client demand for AI is accelerating and our book of business for watsonx and generative AI roughly doubled from the third to the fourth quarter."

For the year, IBM grew revenue by 2% and recorded a 55.4% gross margin. Free cash flow for the year came in at $11.2 billion, up nearly $2 billion from 2022.

Is IBM a buy after its strong earnings report?

Management's outlook for 2024 is what really has investors excited. It's forecasting about $12 billion in free cash flow for the year, well ahead of the analysts' consensus estimate of $10.9 billion.

It will take some streamlining to get there. IBM said it expects to spend about the same amount on restructuring in 2024 as it did in 2023, when it spent about $400 million and reduced its workforce by about 3,900 people. But IBM will also be hiring in growth areas this year, and expects to hold its overall headcount steady.

IBM might not be the best pure-play investment for artificial intelligence or tech consulting, but the company is a solid player in a number of important areas, and it's a cash-generation machine. For investors looking to gain exposure to the biggest tech trends without the volatility of a start-up, IBM stock warrants a close look.