We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties. You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies. In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Alphabet (GOOGL - Free Report) shares have been virtually flat since announcing the $32 billion acquisition of New York City-based cybersecurity startup Wiz last Tuesday.
That said, acquiring Wiz would enhance Alphabet’s position in cloud security and AI-driven solutions. To that point, Wiz specializes in cloud detection and response security (CDR), using AI to identify vulnerabilities across cloud environments.
Expected to close next year, the deal is subject to regulatory approval and would be Alphabet’s largest acquisition, topping the 2012 purchase of Motorola Mobility for $12.5 billion which has bolstered Google’s hardware capabilities and secured patents to protect its Android operating system.
Wiz Overview
Founded in 2020, Wiz’s innovative cybersecurity features include real-time agentless visibility, risk prioritization, access permissions, and routine protection. As reported by Forbes, Wiz has scaled an unprecedented pace, achieving $100 million in annual recurring revenue (ARR) in its first 18 months. Notably, Wiz achieved an ARR of $700 million in 2024 and had a private market valuation of $12 billion.
Attributing to its lofty expansion, Wiz's customers include the three largest cloud computing companies, Alphabet (Google Cloud), Amazon’s (AMZN - Free Report) AWS, and Microsoft’s (MSFT - Free Report) Azure. In addition to this, Wiz’s platform is used by over half of the other Fortune 100 companies along with governments, which paints the picture as to why Alphabet is willing to pay a premium to acquire the cybersecurity firm.
Monitoring Alphabet’s Balance Sheet
While Alphabet is paying a pretty penny to acquire Wiz it’s noteworthy that the tech giant currently has $95.65 billion in cash & equivalents. Plus, Alphabet has $450.25 billion in total assets which is pleasantly above its total liabilities of $125.17 billion.
Image Source: Zacks Investment Research
Google Cloud Growth
Further explaining Alphabet’s willingness to acquire Wiz at a stretched valuation to its market value is that Google Cloud has been the tech giant's fastest-growing segment. Last quarter, Google Cloud revenue expanded 30% to $11.95 billion compared to $9.19 billion in Q4 2023. More impressive, is that the segment's operating income soared 142% to $2.09 billion versus $864 million in the comparative quarter.
As the third largest cloud provider behind Amazon and Microsoft, Google Cloud accounted for 12% of Alphabet's revenue last year at $43.2 billion, a 64% spike from $26.28 billion in 2023.
Image Source: Zacks Investment Research
Conclusion & Final Thoughts
For now, Alphabet stock lands a Zacks Rank #3 (Hold). With its stock down 13% year to date, Alphabet hasn’t been immune to broader market volatility but expectations of double-digit top and bottom-line growth in fiscal 2025 and FY26 are appealing to long-term investors.
Considering Google Cloud has contributed to a significant portion of Alphabet's growth, acquiring Wiz could prove to be a lucrative venture down the line in regards to navigating the ever-evolving and very competitive landscape of cloud computing, cyber security, and AI configuration.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
M&A Watch: Buy Alphabet Stock Amid Plans to Acquire Cybersecurity Startup WIZ?
Alphabet (GOOGL - Free Report) shares have been virtually flat since announcing the $32 billion acquisition of New York City-based cybersecurity startup Wiz last Tuesday.
That said, acquiring Wiz would enhance Alphabet’s position in cloud security and AI-driven solutions. To that point, Wiz specializes in cloud detection and response security (CDR), using AI to identify vulnerabilities across cloud environments.
Expected to close next year, the deal is subject to regulatory approval and would be Alphabet’s largest acquisition, topping the 2012 purchase of Motorola Mobility for $12.5 billion which has bolstered Google’s hardware capabilities and secured patents to protect its Android operating system.
Wiz Overview
Founded in 2020, Wiz’s innovative cybersecurity features include real-time agentless visibility, risk prioritization, access permissions, and routine protection. As reported by Forbes, Wiz has scaled an unprecedented pace, achieving $100 million in annual recurring revenue (ARR) in its first 18 months. Notably, Wiz achieved an ARR of $700 million in 2024 and had a private market valuation of $12 billion.
Attributing to its lofty expansion, Wiz's customers include the three largest cloud computing companies, Alphabet (Google Cloud), Amazon’s (AMZN - Free Report) AWS, and Microsoft’s (MSFT - Free Report) Azure. In addition to this, Wiz’s platform is used by over half of the other Fortune 100 companies along with governments, which paints the picture as to why Alphabet is willing to pay a premium to acquire the cybersecurity firm.
Monitoring Alphabet’s Balance Sheet
While Alphabet is paying a pretty penny to acquire Wiz it’s noteworthy that the tech giant currently has $95.65 billion in cash & equivalents. Plus, Alphabet has $450.25 billion in total assets which is pleasantly above its total liabilities of $125.17 billion.
Image Source: Zacks Investment Research
Google Cloud Growth
Further explaining Alphabet’s willingness to acquire Wiz at a stretched valuation to its market value is that Google Cloud has been the tech giant's fastest-growing segment. Last quarter, Google Cloud revenue expanded 30% to $11.95 billion compared to $9.19 billion in Q4 2023. More impressive, is that the segment's operating income soared 142% to $2.09 billion versus $864 million in the comparative quarter.
As the third largest cloud provider behind Amazon and Microsoft, Google Cloud accounted for 12% of Alphabet's revenue last year at $43.2 billion, a 64% spike from $26.28 billion in 2023.
Image Source: Zacks Investment Research
Conclusion & Final Thoughts
For now, Alphabet stock lands a Zacks Rank #3 (Hold). With its stock down 13% year to date, Alphabet hasn’t been immune to broader market volatility but expectations of double-digit top and bottom-line growth in fiscal 2025 and FY26 are appealing to long-term investors.
Considering Google Cloud has contributed to a significant portion of Alphabet's growth, acquiring Wiz could prove to be a lucrative venture down the line in regards to navigating the ever-evolving and very competitive landscape of cloud computing, cyber security, and AI configuration.