IBM Strengthens AI Platform With Confluent Buyout; Analyst Hikes PT to $325

International Business Machines Corporation (NYSE:IBM) is one of the Hot AI Stocks on Wall Street’s Radar. On December 9, Stifel analyst David Grossman raised the firm’s price target on the stock to $325 from $295 and kept a “Buy” rating on the shares.

The rating affirmation follows IBM’s announcement that it has acquired Confluent for $11 bn, expanding its AI platform and aligning with its hybrid cloud strategy.

“IBM announced the acquisition of Confluent for $11bn (all cash), or ~7x CY27 EV/revenue, in-line with software comps with a similar growth profile (5–9x) and a 34% premium to Friday’s close (12/05/25). Expected close mid-2026, coincidentally the anniversary of the z17 mainframe launch (similar revenue profile).”

The firm noted how CFLT runs the Apache Kafka open source data streaming platform, serving as the standard for real-time data transportation connection. While the company has penetrated 40% of Fortune 500 companies, less than 5% of its 6,500 customers generate over $1 million in annual recurring revenue.

Stifel believes that the strategic underpinnings of the acquisition are solid, and that real-time data streaming is becoming increasingly important for supporting AI use cases.

“IBM historically gets optimal leverage from targets that have challenges penetrating large enterprises and significant potential cost synergies. We estimate the acquisition is modestly dilutive to 2026 FCF (~1%) and neutral/accretive thereafter. We estimate modest EPS dilution (less than 3%) in 2026/2027 due to SBC; however, our analysis excludes any potential revenue synergies.”

International Business Machines Corporation (NYSE:IBM) is a multinational technology company and a pioneer in artificial intelligence, offering AI consulting services and a suite of AI software products.

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