Does IBM’s Major $11 Billion Deal for Confluent Make Its Stock a Buy, Sell, or Hold?

Enterprise AI is increasingly becoming a critical battleground in the AI war. After Alphabet (GOOG) (GOOGL) expanded its partnership with the vibe coding platform, Replit, tech giant IBM (IBM) announced a mammoth $11 billion all-cash deal to acquire data streaming platform Confluent (CFLT). The deal, done to serve its enterprise clients better with enhanced AI offerings, is expected to close by mid-2026.

Commenting on the deal, CEO Arvind Krishna said, “With the acquisition of Confluent, IBM will provide the smart data platform for enterprise IT, purpose-built for AI.”

The market reacted positively to the news as shares of both IBM and Confluent are up, with the CFLT stock seeing a pop of almost 30% following the news of the deal. Meanwhile, IBM expects the acquisition to be value accretive to adjusted EBITDA and free cash flow within the first and second years, respectively.

How Will Confluent Add Value to IBM?

Parting with $11 billion in cash is not a trivial matter. Thus,…