Confluent, Inc. (NASDAQ: CFLT) has suddenly shifted from “AI infrastructure story” to “takeover story.”
On December 8, 2025, multiple outlets reported that IBM is in advanced talks to acquire Confluent for roughly $11 billion, a deal that could be announced as soon as today. [1]
The rumored price implies a hefty premium to Confluent’s last regular-session close and has already sparked sharp gains in off-hours trading — turning the stock into one of the most-watched AI names of the day. [2]
Below is a deep dive into today’s news, current forecasts, and what all of this could mean for Confluent shareholders and would‑be buyers.
1. Where Confluent Stock Stands Right Now
Last close and immediate reaction
- Last regular close (Dec 5, 2025):
Confluent closed at $23.14, down 0.9% on the day, with a market cap around $8.1 billion. [3] - After-hours / off-hours reaction:
After the Wall Street Journal report that IBM is near an $11 billion deal, Confluent shares jumped in off-hours trading:
So even before any official deal announcement, the market is aggressively repricing CFLT toward a takeover level.
Implied takeover price
Based on the reported $11 billion headline figure and Confluent’s ~$8 billion market cap at $23.14, one widely-cited estimate works out to approximately $31.70 per share, a premium of about 37% to Friday’s close. [6]
That’s still below the 2021 IPO price of $36 and far under the post‑IPO peak near $95, but a meaningful bump for investors who held through the 2022–2024 software drawdown. [7]
2. What Exactly Is Happening With IBM?
The core of today’s news
Here’s the gist of the December 8 headlines:
- IBM is in advanced talks to acquire Confluent, with a potential deal size of roughly $11 billion. [8]
- The deal could be announced as soon as Monday, though all reports emphasize that talks could still fall apart. [9]
- The Wall Street Journal first broke the story; Reuters, Bloomberg, Nasdaq, Benzinga, and others have since echoed it. [10]
From IBM’s perspective, Confluent is a way to hard‑wire AI into real‑time enterprise data:
- Confluent’s platform is built around Apache Kafka and related technologies for streaming data — think payment events, web clicks, sensor data, and everything else that AI systems need as it happens, not in nightly batches. [11]
- Techzine notes that Confluent’s tooling is particularly relevant for feeding large AI models in sectors like retail and manufacturing, where real-time diagnostics and uptime matter. [12]
How this fits IBM’s AI and cloud strategy
The Confluent story doesn’t come out of nowhere:
- Reuters and others highlight that IBM has been reshaping itself around hybrid cloud and AI, including its big $6.4 billion acquisition of HashiCorp in 2024. [13]
- Techzine adds that IBM also snapped up DataStax earlier this year to bolster its AI-focused watsonx platform, and that Confluent would be its largest deal in years after Red Hat. [14]
Put simply: IBM wants to own more of the data infrastructure stack that feeds AI, and Confluent is one of the category-defining assets in that space.
How we got here: Confluent was already “in play”
Back in October, Reuters reported that Confluent was exploring a possible sale after drawing interest from private equity firms and strategic buyers. Shares jumped double digits on those reports, giving the company a roughly $7.9 billion market value at the time. [15]
Since then, the stock has traded mostly in the low‑to‑mid 20s, with a recent run‑up into the current takeover speculation. [16]
3. Confluent’s Fundamentals Going Into This Deal Talk
To understand whether the rumored $11B price is rich or reasonable, you need to know what Confluent looks like without an IBM bid on the table.
Q3 2025: steady growth, improving profitability, still GAAP‑negative
Confluent’s latest reported quarter (Q3 2025) showed a company still in high‑growth, margin-improvement mode:
- Revenue: About $298.5 million, beating analyst expectations (~$292.7M) and growing ~19% year over year. [17]
- Subscription revenue: Up roughly 19% YoY; Confluent Cloud revenue up about 24% YoY, indicating stronger growth in the cloud-native part of the business. [18]
- EPS: Non‑GAAP EPS of $0.13 vs. ~$0.10 expected; however, on a GAAP basis the company still posts a negative net margin (~27%) and negative return on equity. [19]
- Guidance: Management guided Q4 EPS to roughly $0.09–$0.10 and full‑year 2025 EPS to ~$0.39–$0.40, signalling that the business is pivoting toward sustained profitability while continuing to invest in growth. [20]
StockAnalysis aggregates analyst forecasts that point to:
- 2025 revenue: ~$1.18 billion, up about 23% from 2024.
- 2026 revenue: ~$1.38 billion, up another ~17%.
- 2025 EPS: about $0.41, rising to ~$0.49 in 2026. [21]
At a proposed $11B enterprise value, the market is effectively valuing Confluent at around 9–10x 2025 revenue and a much higher multiple of near‑term earnings — classic for a strategic AI/data-infrastructure asset.
Product and AI story: Confluent is leaning hard into AI infrastructure
In late October, Confluent rolled out a slate of AI‑centric products:
- Confluent Intelligence – positioned as the “context engine” for AI, continuously streaming and processing historical and real‑time data into AI applications so they can make more accurate, timely decisions. [22]
- Streaming Agents & Real‑Time Context Engine – tooling around Apache Kafka and Apache Flink to build AI agents that observe, decide and act in real time, with built-in machine learning functions for anomaly detection, forecasting and model inference. [23]
- Confluent Private Cloud – a fully managed offering that brings cloud‑like Kafka capabilities on‑premises for heavily regulated environments, marrying “cloud simplicity” with behind‑the‑firewall controls. [24]
On top of that, Confluent was named a Leader in The Forrester Wave: Streaming Data Platforms Q4 2025, underlining its position as one of the top platforms for real-time data streaming used by AI‑driven enterprises. [25]
In short: fundamentally, Confluent has a strong strategic story – and IBM is trying to buy that story.
4. What Are Analysts Saying About CFLT Right Now?
Before today’s takeover mania, analysts already leaned bullish on Confluent.
Consensus rating: “Moderate Buy” to “Buy”
Across multiple aggregators:
- MarketBeat: Consensus rating “Moderate Buy”, based on 1 strong buy, 21 buy, 10 hold, and 2 sell ratings. [26]
- TipRanks: Also “Moderate Buy”, with 26 analysts in the last 3 months, of which 19 rate CFLT a Buy, 6 a Hold, and 1 a Sell. [27]
- StockAnalysis: Lists an overall “Buy” consensus from 32 covering analysts. [28]
So Wall Street largely liked the standalone story even before IBM showed up with a premium.
Price targets: mid‑to‑high 20s on a standalone basis
Recent 12‑month price targets cluster in a fairly tight band:
- MarketBeat: Average target around $27.97, with the range roughly $21–$38, implying about 21% upside from the pre‑deal price of $23.14. [29]
- TipRanks: Average target approximately $27.7, with a high near $31 and a low around $24, indicating ~20% upside from recent prices. [30]
- StockAnalysis: Average target around $29.13, with a range $22–$40, suggesting roughly 26% upside from $23.14. [31]
- Public.com: A similar story, with a compiled target around $28.86 and a consensus Buy rating. [32]
Independent valuation work (for example, Simply Wall St) recently argued that Confluent was trading below a fair value estimate near $27–$28, but also warned that its price‑to‑sales multiple (about 7.3x) was already richer than the broader U.S. software group. [33]
Key point: The standalone Wall Street targets were mostly in the high‑20s, so an IBM takeout at around $31–$32 is a clear premium to where the Street thought CFLT would go on its own over the next year.
5. Ownership, Flows and Insider Activity
The bid is arriving in a stock that is already heavily institution‑owned, with mixed insider behavior:
- Institutional ownership: About 78% of Confluent’s float is held by hedge funds and other institutions. [34]
- Recent buying: First Trust Advisors LP recently boosted its stake by 15.7%, purchasing over 616,000 shares and bringing its holdings to about 4.56 million shares (~1.3% of the company). [35]
- Insider selling: Over the past 90 days, insiders have sold roughly 613,000 shares (including sales by co‑founder/director Neha Narkhede and CFO Rohan Sivaram), even as the stock trended higher. Insiders still own ~9.2% of the company. [36]
Large institutional ownership plus a strategic bidder is exactly the recipe for intense negotiation around final terms — and possibly for other bidders to emerge if they see IBM as setting a floor.
6. Is the Rumored $11 Billion Price “Fair”?
This is where things get interesting.
From a pure numbers standpoint
Using the rough figures we have:
That equates to something like 9–10x forward revenue, depending on how you account for net cash and any deal adjustments.
That’s not cheap in a vacuum, but:
- Confluent is a category leader in streaming data infrastructure. [39]
- The deal price is still below IPO and far below the post‑IPO peak, which many long‑time shareholders will quietly note. [40]
- Peers in high‑growth, critical AI infrastructure often trade at similarly elevated multiples, particularly when they are strategic for hyperscalers and large software vendors.
Simply Wall St’s narrative before the deal talk suggested that, based on a discounted cash‑flow style framework, Confluent might be mid‑teens percent undervalued around $23, yet also warned that its price‑to‑sales was already above the broader software sector average. [41]
From that vantage point, an M&A premium of ~30–40% does not look outrageous.
Strategically for IBM
IBM’s thesis appears straightforward:
- AI and hybrid cloud growth require constant streams of high‑quality data.
- Confluent’s platform, plus its new Confluent Intelligence and Private Cloud offerings, gives IBM a deeply integrated pipeline from on‑prem and multicloud data sources into AI agents and models. [42]
- Combined with HashiCorp, DataStax, and the watsonx stack, IBM builds a full‑stack story: “We’ll manage your infrastructure, your cluster orchestration, and the real‑time data that powers your AI.”
For a company IBM’s size (market cap near $290 billion), paying a high single‑digit billion amount for a strategic control point in AI data infrastructure is a bold but coherent move. [43]
7. What Happens Next? Scenario Thinking for Investors
Nothing is signed until it’s signed. The reports themselves are explicit: talks can still fall apart. [44]
So from an investor’s point of view, we’re now in classic event‑driven territory.
Scenario 1: Deal announced near the rumored terms
If IBM formally announces a deal around $31–$32 per share:
- CFLT stock likely trades close to the offer price, with a typical “deal spread” reflecting regulatory and closing risk.
- Upside from here:
- From Friday’s close (~$23.14), that’s roughly 35–40% upside, much of which already appears to be reflected in after‑hours trading. [45]
- Ceiling on upside: Once the market believes the deal is “real,” shares usually cap out near the offer unless:
- A higher counter‑bid emerges, or
- The market believes IBM’s offer is too low and that the board might push for a better price.
Event‑driven traders would then be focused on deal spread vs. risk: how likely is regulatory approval, and what’s the timeline to close?
Scenario 2: Talks collapse or terms disappoint
If the deal falls apart or the final terms come in lower than expected:
- CFLT would likely drop sharply from any takeover‑inflated level — often back toward pre‑rumor trading ranges, adjusted for any improved fundamentals or sentiment.
- There is now, however, an established precedent that serious strategic buyers are interested in this asset. Between the October “exploring a sale” headlines and today’s IBM reports, the market knows Confluent is not a wallflower. [46]
- That could set a soft floor above the absolute lows, but there’s no guarantee; AI-infrastructure valuations can be brutal when growth expectations compress.
Scenario 3: Bidding war or “improved terms”
Less likely, but not impossible: another large technology or cloud vendor decides Confluent is too strategic to let IBM have it uncontested.
- The rumored ~9–10x revenue multiple is high, but not insane for a unique asset in a hot category.
- A competing bidder would likely have to justify going meaningfully above $11B to win the board and shareholders over.
This is speculative, but whenever you see a strategic asset with multiple historical suitors and a market‑moving bid, optionalities multiply.
8. Should Long‑Term Investors Still Care About the Fundamentals?
Yes. Even in takeover land, fundamentals matter:
- If the deal closes:
Your return will largely be dictated by the spread between your purchase price and the final deal price, plus the time value until closing. - If the deal breaks:
The standalone value of Confluent — its growth trajectory, path to profitability, AI positioning, customer base, and competitive moat — will immediately move back to center stage.
On that front:
- Revenue is expected to grow high‑teens to low‑20s percent annually for the next couple of years. [47]
- Analysts see EPS turning and improving meaningfully into 2025–2026. [48]
- The company continues launching new AI‑heavy products (Confluent Intelligence, Private Cloud, Tableflow expansions) and is viewed as a leader in streaming data platforms. [49]
Whether under IBM’s umbrella or as an independent company, Confluent’s long‑term thesis lives or dies on the same question:
Will real‑time data streaming become truly mission‑critical infrastructure for AI‑driven enterprises — and will Confluent capture enough of that value at attractive margins?
Right now, IBM is effectively answering “yes” with an offer that puts real money behind that belief.
9. Key Takeaways for Confluent (CFLT) Stock on December 8, 2025
- IBM is reportedly near a roughly $11B deal to acquire Confluent, in advanced talks that could yield an announcement as soon as today – but nothing is finalized. [50]
- The rumored price implies about $31–32 per share, a 30–40% premium to recent trading levels and well above consensus Wall Street price targets in the high‑20s. [51]
- Off-hours trading has already repriced CFLT sharply higher, with after‑hours prints reported around $28–29 as of today. [52]
- Fundamentally, Confluent is showing ~20% revenue growth, improving profitability, and a strong AI‑centric product roadmap, but still carries negative GAAP margins and a rich revenue multiple. [53]
- Analysts remain broadly positive with “Moderate Buy” to “Buy” ratings and average 12‑month targets around $28–29 on a standalone basis. [54]
- For investors, CFLT has shifted into event‑driven mode: returns from here depend heavily on if, when, and at what terms an IBM deal is actually signed — and on the residual standalone value if talks fail.
References
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