A Bank of America note highlights IBM's increasing reliance on acquisitions for software growth. IBM spent $11 billion to acquire real-time data company Confluent in March 2026. Nearly all of IBM's software sales growth now stems from this purchase.
IBM's organic software sales were flat in the second quarter. Bank of America estimates these sales could decline slightly in the third quarter. The Confluent acquisition is expected to add about $350 million in the third quarter. This boosts the software segment's overall growth to approximately 3.5%.
IBM's CFO acknowledged weakness in homegrown software sales in July. Despite this, Bank of America maintained its "Buy" rating on the stock. The firm's analyst described organic growth as "improving but below ideal." The acquisition provides a necessary cushion as IBM works to restart its internal growth engine.