Post Views: 75
Google just announced its largest deal ever, with major implications for the competitiveness of its cloud business and the overall cybersecurity industry. The Alphabet -owned tech giant said Tuesday it agreed to buy cloud security startup Wiz for $32 billion in cash. The privately held firm, founded in 2020 by former Israeli intelligence officers, had rejected Google’s $23 billion takeover offer last year. Wiz was considering an initial public offering (IPO) when Google came back and inked the deal, which is expected to close next year. The Wiz security platform will join Google’s cloud infrastructure. Alphabet shares fell 2.5% following the news, which landed on a terrible day for technology stocks and the broader market What it means for Google The Wiz acquisition will allow Google Cloud — the third biggest behind Amazon Web Services (AWS) and Microsoft Azure — to improve its cybersecurity capacity and to better compete with its peers. A more secure cloud can lead to more business. “The Wiz deal would clearly bolster the Google Cloud offering and value proposition to enterprises,” Wedbush wrote Tuesday. Wiz is an end-to-end security platform provider used by organizations that run and build on the cloud. It covers every aspect of cloud security from prevention, active detection, and response. Wiz is considered by TD Cowen to be one of the fastest-growing companies in cloud security, with $500 million in annual recurring revenue (ARR) as of January. CNBC’s David Faber said Tuesday on “Squawk on the Street” that Wiz may have reached ARR of $1 billion. The startup is headquartered in New York, with offices in Tel Aviv, outside Washington, D.C., Austin, and Denver. What it means cyber stocks Wiz is competing in the fast-growing global market for cloud security with the likes of Club names Palo Alto Networks and CrowdStrike . Jim Cramer said Tuesday on “Squawk on the Street” that the Google-Wiz deal may make people “feel a little bit better” about cyber and “remind people why it should be bought.” After an incredible 2024 and a roaring start to 2025, the cybersecurity cohort has been out of favor lately. “There had been a belief that suddenly there was some cyclicality to it,” Jim added. Based on what Google paid, Jim suggested that Wiz’s staggering valuation makes cloud-native CrowdStrike “dramatically undervalued,” potentially signalling the stock should be above its all-time closing high of $455 on Feb. 18. Shares of CrowdStrike and Palo Alto Networks were modestly lower Tuesday, which Jim said was a mistake. Bottom line Jim said this acquisition does not pose an antitrust threat but may draw regulatory scrutiny because Google was deemed a monopolist by the Justice Department under former President Joe Biden . Now under current President Donald Trump , who is perceived to be more business-friendly, the Justice Department last week affirmed the agency’s effort to get Google to sell its Chrome browser but no longer wanted to compel the sale of its artificial intelligence investments. Regulators also kept their remedy to ban payments to distribution partners like Apple and Android manufacturers. The ongoing litigation against Google continues to be a major overhang for Alphabet stock and a reason why Jim hasn’t been a fan lately. These regulatory headwinds have put Alphabet shares “in the penalty box,” Jim said, noting the stock’s 15% decline in 2025 compared to the S & P 500’s pullback of 4.5% year to date. “The stock has been a very poor performer. I’m glad that we have very much reduced the size of Google [last year]. We didn’t like it and we took action. I don’t want to buy it back,” he added. (Jim Cramer’s Charitable Trust is long GOOGL, PANW, CRWD, MSFT, AMZN. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
The Wiz logo on a smartphone arranged in New York, US, on Tuesday, July 16, 2024.
Gabby Jones | Bloomberg | Getty Images
Google just announced its largest deal ever, with major implications for the competitiveness of its cloud business and the overall cybersecurity industry.
