Tech giant Alphabet (GOOGL) is on the brink of acquiring cybersecurity startup Wiz, according to the Wall Street Journal. Interestingly, this deal is expected to be worth about $23 billion, marking the company’s largest acquisition.
Deal Rationale
The acquisition is strategically valuable for Alphabet because Wiz’s cloud-based cybersecurity software will enhance Alphabet’s cloud computing services.
While Alphabet is a dominant force in search and online advertising, it trails behind its competitors in cloud computing. Thus, the company is actively investing in cloud technologies to boost its presence in this fast-growing sector. The acquisition of Wiz should help GOOGL strengthen its position in the cloud space.
It is worth noting that Alphabet previously acquired a cybersecurity company, Mandiant, for nearly $5.4 billion in 2022.
What is the Price Target for GOOGL Stock?
Alphabet stock has gained about 33% year-to-date. The company’s efforts to reduce costs and its investments in artificial intelligence have supported the stock. Further, it sports a Strong Buy consensus rating on TipRanks based on 32 Buy and six Hold recommendations.
The analysts’ average price target on GOOGL stock is $199.97, implying 8.052% upside potential from current levels.
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