Alphabet Inc (NASDAQ: GOOGL) is in focus today after announcing plans of acquiring Wiz for $32 billion.
Wiz is a cloud security startup that will help Alphabet strengthen its footprint in cybersecurity and pose a more fierce competition in cloud-computing to the likes of Amazon and Microsoft.
Note that it’s not the first time that Google is considering buying Wiz.
In 2024, the tech behemoth was willing to spend $23 billion to acquire the IT security company but the deal had to be shelved eventually due to antitrust concerns.
Google stock is keeping roughly flat following Wiz news on Tuesday.
Trump administration could approve Google-Wiz deal
Alphabet is spending a rather significant $32 billion on buying Wiz as the acquisition will bring it access to the startup’s AI enabled cybersecurity solutions.
In fact, the all-cash transaction will be Google’s largest to date.
While the titan’s attempt to buy Wiz was blocked last year, the new administration’s pro-business stance and easier regulatory policies could enable it to close the agreement in 2025.
Note that Wiz is a fast-growing software company. Its latest funding round in the second quarter of last year valued it at about $12 billion.
The news arrives following a 20% hit to Google stock amidst a broader, tariffs-driven sell-off in the US tech stocks.
Wiz is growing at a rapid pace
Established in 2020, Wiz is an IT security company that took only 1.5 years to reach $100 million in annual recurring revenue.
Before its talks with Google last year, the startup was already considering a US initial public offering (IPO) and targeting a 10x growth in its annual recurring revenue to about $1 billion.
Wiz has an attractive portfolio of cloud security products focused on prevention as well as active detection and response.
Alphabet’s $32 billion proposal is super exciting for Wiz considering its chief executive, Assaf Rappaport, said “saying no to such humbling offers is tough” even last year when Google valued it at about $23 billion only.
The only reason it eventually walked away from the transaction was antitrust concerns.
Cybersecurity is in great demand in 2025
Cybersecurity has been attracting massive interest globally ever since CrowdStrike’s outage last year that significantly hurt operations across a number of industries.
According to Statista, the cybersecurity market will grow at a compound annualised rate of more than 7.5% through the end of this decade.
Tech stocks have been hit hard in recent weeks amidst concerns that Trump tariffs could eventually lead to a recession in the United States. Google itself is down about 20% versus its YTD high.
Still, Wall Street continues to recommend buying Alphabet shares. The consensus rating on them currently sits at “overweight” with the mean target of $219 indicating potential upside of about 35% from here.
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