Why IBM Thinks Confluent Can Speed Up Its AI Strategy

Confluent’s platform enables real-time data integration and management, critical for AI and hybrid cloud applications.

• The combination of IBM’s AI infrastructure, automation, and consulting offerings with Confluent’s data streaming services will provide revenue growth.
• IBM has reached an agreement to acquire Confluent for $11 billion. 
• Confluent’s total addressable market (TAM) has doubled from $50 billion to $100 billion in 2025.

IBM (IBM) announced on Monday a definitive agreement to acquire Confluent, Inc. (CFLT) for $31 per share in cash, valuing the enterprise at approximately $11 billion. 

Confluent, an enterprise data streaming company built on Apache Kafka, provides a platform that enables real-time data integration and management, critical for AI and hybrid cloud applications.

How Will The Acquisition Help IBM? 

Confluent’s platform allows organizations to process and govern real-time data across systems, addressing data silos that hinder AI deployment. 

The combination of IBM’s AI infrastructure, automation, and consulting offerings with Confluent’s data streaming services is expected to generate significant revenue growth. IBM expects the deal to boost adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the first full year and increase free cash flow in the second year after closing.

Furthermore, acquiring Confluent expands on IBM’s previous buys of open-source firms like Red Hat and Hashi Corp. 

IBM’s stock inched over 0.9% lower in Monday’s premarket. On Stocktwits, retail sentiment around the stock changed to ‘neutral’ from ‘bearish’ territory the previous day amid ‘normal’ message volume levels. 

Confluent’s stock traded over 29% higher in Monday’s premarket. 

Transaction Details

IBM will use cash on hand to acquire Confluent, with approvals already secured from both companies’ boards. The transaction is expected to be completed by the middle of 2026. 

“IBM and Confluent together will enable enterprises to deploy generative and agentic AI better and faster by providing trusted communication and data flow between environments, applications and APIs.”

-Arvind Krishna, Chairman, President and CFO, IBM

Confluent’s total addressable market (TAM) has doubled from $50 billion to $100 billion in 2025, reflecting increased demand for real-time data solutions. 

IBM stock has gained over 40% in 2025 and over 33% in the last 12 months. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.<