By Nigam Arora
Congratulations! Confluent CFLT has become the 221st buyout of an Arora Portfolio company. There is a 33% gain in a short time.
Understand CFLT
It is important to understand what CFLT does. The reason is that The Arora Report in the process of identifying other similar companies. Such companies may also be bought out. There will be new signals in ZYX Buy when appropriate.
Confluent is a real-time data streaming company that lets enterprises move and process data continuously across all their systems. It turns messy, siloed, slow-moving data into a live, unified data pipeline across apps, clouds, and databases. This “data backbone” is mission-critical for modern digital operations.
The AI Angle
AI systems, especially enterprise generative AI, copilots, and agentic automation, only work as well as the fresh, trusted data they receive.
Confluent gives companies:
- Real-time event streams
- Low-latency data routing
- Clean, consistent, governed data feeds
This is exactly what production-grade AI needs. In IBM’s words, Confluent becomes the “smart data layer” feeding its AI stack.
Why IBM Is Buying It
IBM is making its biggest acquisition since Red Hat because:
- AI requires real-time data: IBM wants end-to-end ownership of the AI + data + hybrid cloud stack.
- Enterprise infrastructure play: Confluent plugs directly into IBM’s software, consulting, and AI platform, strengthening its competitive moat.
- Hybrid cloud expansion: IBM is doubling down on multi-cloud data architecture, where Confluent is already widely used.
- Cross-sell synergy: Confluent’s large enterprise customer base aligns with IBM’s largest, highest-budget clients.
The Offer
The offer is for $31 cash. The deal is expected to close mid next year. The stock is trading at $29.74 as of this writing. The 33% gain is to $29.74. The gain to $31 is 39%.
Profiting From Buyouts
To date, 221 Arora Portfolio companies have been bought out, providing large gains for members who routinely invest in buyout targets. This performance is better than the firms that charge $50,000 per year and provide buyout advice. With The Arora Report, you get so much more.
What To Do Now
What to do now is a matter of personal preference. For those deciding to hold, there is an additional return of 8.47%. There is a slight risk in holding. As always, there is no guarantee that a deal will close.
Most investors may consider selling in the open market and taking profits.
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This post was published yesterday on ZYX Buy Change Alert.
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Nigam Arora
Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.
