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Analysts are weighing in on the unconfirmed report that Alphabet (NASDAQ:GOOG) (GOOGL) is in advanced talks to acquire cybersecurity startup Wiz for roughly $23 billion.
Bank of America analyst Justin Post said the deal underscores the importance of cybersecurity in the Cloud, and thinks Google (GOOG) likely sees an opportunity to leverage Wiz’s product capabilities to gain industry share. Post also warned that a potential deal will likely face significant regulatory scrutiny. However, as a number three Cloud services provider with less than 20% industry share, Post and the BofA analyst team think it has a better chance in court than a consumer-focused deal. Potential positives seen from a deal for Wiz include Google (GOOG) having an enhanced cloud security offering with a big total addressable market and adding to the multi-cloud offering.
Wedbush Securities analyst Dan Ives noted that a deal for Wiz would be Google’s (GOOG) largest M&A deal ever and would be doubling down on the cloud cybersecurity space after the Mandiant acquisition in 2022. “For Google this would be a shot across the bow at Microsoft and Amazon making a major bet on the cybersecurity space to complement its flagship GCP offering in the cloud. This would give Google an edge on a number of cloud deployments and further monetize the cybersecurity cloud space with still less than 50% of the workloads not on the cloud globally,” he observed.
Shares of Google (GOOG) edged 0.05% higher in premarket action to $186.85.