What Happened?
Shares of data streaming platform provider Confluent (NASDAQ: CFLT) jumped 10.7% in the morning session after reports surfaced that the company was exploring a potential sale after receiving acquisition interest.
The interest reportedly came from private equity firms and other technology companies. According to multiple sources, Confluent engaged an investment bank to assist with the sale process, which was said to be in its preliminary stages. The consideration of a sale followed a period where the company's stock price had fallen, partly due to the loss of a major customer, making it a more vulnerable target despite its sought-after technology that supports artificial intelligence. In response to the news, Wolfe Research raised its price target on the stock to $30 from $22, viewing Confluent as a strategic asset in the data streaming market.
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What Is The Market Telling Us
Confluent’s shares are very volatile and have had 23 moves greater than 5% over the last year. But moves this big are rare even for Confluent and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was about 23 hours ago when the stock dropped 4.9% after tech stocks pulled back as a report raised concerns about artificial intelligence demand and profitability. Oracle shares lost more than 5% following news of its cloud business generating lighter margins than expected. According to internal documents cited in the report, the gross profit margin for this business was only 14%, a figure much lower than what analysts had expected. This suggested that the high costs of running the advanced chip infrastructure were weighing on profitability.
Compounding these worries was the ongoing U.S. government shutdown, in its second week, with no clear resolution in sight from Washington. These updates drove investors away from riskier assets and towards safe havens, a trend highlighted by gold futures hitting a record $4,000 per ounce for the first time.
Confluent is down 19.2% since the beginning of the year, and at $22.84 per share, it is trading 39.3% below its 52-week high of $37.65 from February 2025. Investors who bought $1,000 worth of Confluent’s shares at the IPO in June 2021 would now be looking at an investment worth $507.33.
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