Why Stifel Says International Business Machines (IBM) Remains a Top Large-Cap Defensive AI Stock

Core Viewpoint - IBM is recognized as a leading AI stock on Wall Street, with analysts highlighting its strong free cash flow (FCF) performance and robust software growth, leading to an increased price target from Stifel [1][4]. Financial Performance - IBM's fourth-quarter 2025 results showed 7% organic revenue growth and 15% earnings per share growth, aligning with or slightly exceeding consensus expectations [2]. - The company reported a $0.7 billion, or 10%, outperformance in FCF for Q4 2025, with 2026 FCF guidance also exceeding consensus by $0.7 billion (4-5%) [3]. Analyst Insights - Stifel maintains a Buy rating on IBM, raising the price target to $340 from $325, citing its status as a top large-cap defensive pick [1][4]. - The stock is currently trading at approximately a 35% premium to the equal-weight S&P 500, consistent with its long-term trend [4].