Why Traders Are Backing IBM and ASML Over other AI Plays

• IBM acquired Confluent for $11B in cash at a 34% premium to dominate real-time data streaming for AI applications.

• IBM’s AI book of business reached $9.5B in Q3 with infrastructure revenue up 17% year over year.

• ASML reported $7.52B in Q3 revenue with a 29.4% profit margin from its monopoly in extreme ultraviolet lithography technology.

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Shares of ASML (NASDAQ:ASML) and IBM (NYSE:IBM) are riding a wave of retail trader enthusiasm this week, with both stocks showing strong bullish sentiment on Reddit. ASML closed at $1,111.60 on December 9, up 58% year to date, while IBM hit $312.67 on December 10, climbing 49% from its 52-week low. The synchronized optimism reflects retail traders’ belief that both companies are positioned to capitalize on AI infrastructure demand without the speculative overspending plaguing mega-cap tech peers.

IBM’s $11 billion all-cash acquisition of Confluent (NASDAQ:CFLT) triggered a surge in retail trader activity, particularly on r/wallstreetbets where the announcement generated 265 upvotes and 58 comments. The deal, offering $31 per share (a 34% premium), positions IBM to dominate real-time data streaming for AI applications. CEO Arvind Krishna stated that “IBM and Confluent together will enable enterprises to deploy generative and agentic AI better and faster.” Reddit users expressed strong support for the move, with one highly-upvoted comment stating: “IBM making smart moves. They’re not burning cash on speculative AI like others.” Another user noted: “This is how you do M&A in the AI space – buying proven revenue streams, not hype.”

Confluent jumps 30% premarket after IBM buys it for $11B in cash as AI data demand surges
by u/callsonreddit in wallstreetbets

Retail traders back IBM’s measured approach to AI. Three factors drive the bullish sentiment:

• IBM’s AI book of business hit $9.5 billion in Q3, with infrastructure revenue surging 17% year over year

• The Confluent deal adds to a proven M&A track record, following the $34 billion Red Hat acquisition that transformed IBM’s cloud business

• Krishna’s public skepticism of trillion-dollar AI data center spending resonates with value-focused investors who prefer targeted, profitable investments

ASML’s bullish sentiment stems from its monopoly position in extreme ultraviolet lithography technology, essential for manufacturing advanced AI chips. The company reported $7.52 billion in Q3 revenue with a 29.4% profit margin, demonstrating pricing power in a capital-intensive industry. Retail traders have maintained consistent interest in ASML, viewing the 58% year-to-date gain as justified by the company’s irreplaceable role in AI chip production. With analyst targets averaging $1,064, traders see limited downside risk despite the stock trading near $1,111. Both companies represent a shift in retail sentiment toward profitable AI plays rather than speculative growth stories.

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