Confluent shares spiked 36.58% this week. Here`s why...

Confluent shares jumped in premarket trading in New York after a Wall Street Journal report said IBM is in talks to buy the data-infrastructure company for $11 billion. People familiar with the matter said an agreement could be announced as early as today.

Confluent builds software around Apache Kafka, an open-source technology created at LinkedIn and later spun out. Its platform allows companies to move and process data in real time rather than in delayed batches. The approach supports AI and machine-learning systems that rely on continuous data flows.

A completed deal would be IBM’s largest in years and would follow its $6.4 billion acquisition of HashiCorp last year. IBM has been shifting its portfolio toward AI and cloud tools while reducing exposure to slower-growth businesses. The company has reported rising consulting revenue, cut thousands of jobs as part of a workforce restructuring, and increased investment in quantum computing development.

Confluent shares rose 28% in premarket trading. The stock remains down 17% for the year as of Friday’s close and has traded within a narrow range since the second half of 2022.

The talks add to a period of active dealmaking by IBM as it expands software and services linked to emerging computing demands. The company has outlined a strategy centered on AI-driven workloads, hybrid cloud adoption, and advanced research areas such as quantum systems.

Confluent’s technology is used to manage streaming data across large organizations. It supports applications that require constant data movement, including automated operations and analytics. The company’s tools are positioned in markets that have grown alongside increased interest in real-time processing.

IBM has pursued acquisitions to broaden its role in that sector. The firm has emphasized products that help enterprises run distributed computing environments and build AI-ready infrastructure.

The potential Confluent transaction would mark another step in that effort. Both companies declined to comment on the report.