Shares of American software firm Confluent soared in premarket trading on Wednesday after reports that the company is exploring a potential sale following acquisition interest from private equity and technology firms.
The stock rose 18%, its sharpest single-day jump in months, following a Reuters report that cited sources who said Confluent has hired an investment bank to explore a potential sale after receiving separate acquisition approaches from private equity firms and technology companies.
The talks are said to be in the early stages, and sources cautioned that there is no guarantee a deal will be reached.
The company, valued at roughly $7 billion, has seen its shares drop about 26% so far this year.
Sources told Reuters that while Confluent’s technology remains in high demand, its steep stock decline in July—after losing a major customer—left it more exposed to potential takeover interest.
Mountain View, California-based Confluent, founded by the original creators of Apache Kafka, provides software that enables companies to process and manage massive, real-time data streams.
Its technology is critical for businesses that rely on rapid data flow, from financial services to e-commerce and artificial intelligence applications.
AI race boosts demand for data platforms
Confluent’s software allows organizations to process data in motion—an essential capability for artificial intelligence systems that require constant, real-time updates to train and operate efficiently.
As companies race to develop generative AI tools, demand for robust data infrastructure platforms like Confluent’s has surged.
The potential deal comes amid growing interest in data management and AI-related firms.
In May, Salesforce announced an $8 billion acquisition of Informatica to strengthen its AI capabilities.
Analysts say such moves reflect a broader consolidation wave in the data infrastructure space, as companies look to secure key technology that underpins AI operations.
Confluent’s Q2 earnings disappointed investors
Confluent’s second-quarter earnings in August disappointed investors, with shares falling more than 30% after the results.
Brokerage firm Stifel downgraded the stock from “Buy” to “Hold,” citing slower new customer growth, reduced workload activity, and a major AI-native client migrating off Confluent Cloud.
Management said on the earnings call that the customer shift would temporarily weigh on cloud revenue growth, but it reaffirmed long-term optimism about subscription momentum.
The company expects third-quarter subscription revenue of around $281–$282 million and full-year 2025 subscription revenue of roughly $1.1 billion.
Confluent also forecast an operating margin of about 7% and non-GAAP net income per share of approximately $0.36 for fiscal 2025.
It is set to release its third-quarter earnings on October 27, which may offer additional clarity on the company’s trajectory and whether formal acquisition offers have materialized.
For now, investors are betting that Confluent’s strategic value in the AI ecosystem could make it one of the next major takeovers in the rapidly evolving data technology landscape.
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