Alphabet, Wiz Deal Represents Growth As Investors Appear 'Twitchy': Analysts

Google parent Alphabet Inc GOOGL acquired cloud security startup Wiz for $32 billion in an all-cash transaction.

Here are some key analyst takeaways.

Cantor Fitzgerald analyst Deepak Mathivanan maintained a Neutral rating and price target of $200.
Rosenblatt Securities analyst Barton Crockett reiterated a Neutral rating and price target of $205.

Check out other analyst stock ratings.

Cantor Fitzgerald: The Wiz acquisition is anticipated to close in 2026 after regulatory approvals, following which the cloud security company's offerings are expected to be available across other cloud service providers, Mathivanan said in a note. "We think Wiz significantly enhances GCP’s security offerings," which should help Alphabet compete better with Amazon.com Inc's AMZN AWS and Microsoft Corp's MSFT Azure, "with an extensive product suite," he added.

The Cloud-Native Application Protection Platform (CNAPP) market is "among the fastest-growing category within cybersecurity currently and Wiz is used by around 50% of Fortune 100 companies, the analyst stated. "More recently, the company has made a push into the AI Security Posture Management (AI-SPM) business- helping to further increase data security for customers’ AI models, which can consume massive amounts of data," he further wrote.

Rosenblatt Securities: Wiz's revenues are widely expected to grow by around 50% year-on-year to near $1,000 billion in 2025, Crockett said. The cloud security firm's multi-cloud capabilities, which Alphabet intends to retain post-acquisition, is "clearly helpful for a rising share-gainer like Google Cloud," he added.

While Wiz's revenue growth may be modest compared to Google Cloud, it represents growth in an area "that is very important to investor sentiment, and where investors appear to be twitchy right now around small wiggles in quarterly growth rates," the analyst wrote. Although the acquisition will help Google Cloud, there are antitrust risks and concerns around the price being paid for the purchase, he further stated.

Price Action: Shares of Alphabet had risen by 0.73% to $161.84 at the time of publication on Wednesday.

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