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Alphabet (GOOGL) is in focus this morning after announcing its largest acquisition to date.
The tech titan has agreed to buy Wiz, an information technology security startup based out of New York for a hefty $32 billion, hoping the takeover will strengthen its footing in the fast-growing cybersecurity market.
Google shares are still down 2.7% at the time of writing on March 18, but much of that weakness is related to the broader tariffs- and economic uncertainty-driven pressure on the U.S. tech stocks.
What Wiz Deal Means for Google Stock
The Wiz acquisition may be a reason to bet on Google as it could help alleviate the recent slowdown in its cloud-computing revenue.
The deal will add another layer of security to Google Cloud, potentially making it more appealing to enterprises than competing solutions like AWS or Azure.
Investors should also note that NY-based Wiz is a fast-growing startup that has gained market share from some of the more established names in cybersecurity in recent years. This further illustrates the potential of this acquisition to turbocharge Google’s cloud-computing sales.
Plus, Google stock is now down more than 15% in the year to date. So, the valuation tied to this AI stock is quite attractive at the time of writing as well.
Analyst’s View on Google Buying Wiz
Wedbush analyst Dan Ives is bullish on Google buying Wiz for $32 billion as it could make Google Cloud more attractive and improve its value proposition to enterprises.
He expects Google to turn this acquisition into “$1 billion-plus cybersecurity arm given its massive installed base and go-to market strategy along with Wiz being the premier CNAPP provider in the industry.”
Wedbush’s “Outperform” rating on Google stock comes with a price target of $220. This target indicates potential upside of nearly 40% from current levels.
A small dividend and an aggressive buyback program make for great additional reasons to have GOOGL in your investment portfolio.
Street Sees Massive Recovery in GOOGL Ahead
Despite a continued hit to Google shares, Wall Street remains bullish as ever on the Nasdaq-listed firm.
The consensus rating on GOOGL currently sits at “Strong Buy” with the mean target of about $218 indicating potential upside of more than 35% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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