HashiCorp’s stock price witnessed a remarkable surge following reports of discussions between the company and IBM regarding a potential acquisition. The shares of HashiCorp saw a spike of up to 26% on Tuesday after a media report surfaced, speculating that IBM was in talks to acquire the cloud software maker.

Developers utilize HashiCorp’s software for setting up and managing infrastructure in public clouds used by tech giants like Amazon and Microsoft. Companies rely on HashiCorp for managing security credentials as well. The Wall Street Journal mentioned, citing unnamed sources, that a deal between IBM and HashiCorp could materialize in the coming days.

The representatives for both HashiCorp and IBM refrained from commenting on market rumors or speculations. Founded in 2012, HashiCorp went public on Nasdaq in 2021. The company reported a net loss of almost $191 million on $583 million in revenue in the fiscal year ending January 31, as per its annual report. In December, Mitchell Hashimoto, a co-founder, announced his departure from HashiCorp.

During the mentioned fiscal period, HashiCorp experienced a revenue increase of close to 23%, a stark contrast to IBM’s 2% revenue growth in 2023. IBM executives cited a challenging economic environment during a conference call with analysts in January. The multinational corporation, renowned for its hardware, software, and consulting services, is scheduled to report its earnings on Wednesday.

A regulatory filing revealed that Cisco held $9 million in HashiCorp shares by the end of March. Reports also surfaced about early acquisition discussions between Cisco and HashiCorp in 2019. Although IBM’s shares dipped after The Wall Street Journal’s article was published, they swiftly rebounded.

For more details, you can read the full report by The Wall Street Journal here.