This Software Stock Is Rising Sharply. It’s Getting Takeover Interest.

Confluent stock gained following a report that said the company was weighing a potential sale. (Dreamstime)

Key Points

• Confluent stock rises on a report of potential acquisition interest.
• The company is working with an investment bank regarding a sale process, which is currently in the early stages.
• Confluent Cloud subscription business growth fell to 28% in the second quarter, below 30% for the first time.

Confluent stock popped Wednesday following a report that said the software company was weighing a sale after attracting acquisition interest from private-equity firms and other technology players.

The data infrastructure company is working with an investment bank on the sale process, which is in its early stages, Reuters reported, citing people familiar with the matter.

Confluent didn’t immediately respond to a request for comment from Barron’s.

The stock jumped 11% to $23.09. The benchmark S&P 500 was rising slightly.

Confluent shares sank in July after second-quarter results were underwhelming. Sales attributed to the company’s Confluent Cloud subscription business, one of its biggest money makers, saw only 28% growth in the quarter, falling below 30% for the first time in company history.

Management remarked on the earnings call that an AI-native customer was cutting back on their Confluent Cloud usage, which was expected to eat into cloud revenue growth rates. The company is set to report third-quarter earnings on Oct. 27.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com