As Google parent Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) is reportedly close to a historic acquisition of a cloud security startup for $23 billion. With Co., Ltd.The move has been touted as a strategic “poker move” that could bring about major changes in the M&A industry for big tech companies.
Analysts are buzzing with insights into how the potential deal could reshape the industry and what it could mean for future mergers and acquisitions.
Wedbush Securities Analyst Daniel Ives Alphabet is describing its plan to buy cybersecurity giant Wizz for $23 billion as a strategic “poker move,” which would be the company's largest M&A deal since its planned 2022 acquisitions. Mandiant Get.
Ives predicts that the big tech M&A environment will accelerate if Trump wins the White House in November, predicting that “the potential Google-Wiz deal will be just the tip of the iceberg for a major big tech M&A cycle in 2025.”
Related article: Google parent Alphabet reportedly considering $23 billion acquisition of cybersecurity firm Wizz to compete with Microsoft and Amazon; top analyst predicts “tech M&A to surge in the future”
Rosenblatt Analyst Katherine Trebnick He highlighted Wiz's AI-powered solutions and strong financial position, highlighting the strategic importance of the transaction.
She stressed that the deal surpasses Alphabet's previous record-setting $5.4 billion acquisition of Mandiant and highlights the growth potential of the cloud security market. “Wizz is a powerful force in the cloud security market,” Trebnick said.
According to analysts at Cantor Fitzgerald Lee Yi-bokAlphabet's $23 billion takeover offer “nearly doubled Wizz's monthly valuation in about two months.”
Lee suggests that even if the deal doesn't go through, it will serve as a benchmark for other CNAPP (Cloud Native Application Protection Platform) vendors. He recommends looking at CrowdStrike, Palo Alto Networks, and Zscaler.
KeyBanc Capital Markets Analyst Justin Patterson The company sees the acquisition as a significant enhancement to Alphabet Cloud's cybersecurity capabilities.
With Wiz's reported ARR of $350 million, Patterson believes the acquisition will be primarily funded through cash and will strengthen Alphabet's cloud security differentiation.
Oppenheimer analyst Itai Kidron The acquisition will position Alphabet as a leading cloud security vendor and among the top 10 companies in the security space overall, the company noted.
He expects the acquisition will accelerate market consolidation, impacting competitors such as Microsoft and AWS and opening up opportunities for other security vendors.
Overall, Alphabet's acquisition of Wiz isn't just a high-profile deal, it represents a pivotal moment in the continuing evolution of the tech industry.
As analysts speculate about the broader impact, it's becoming clear that the move could portend more M&A activity among big tech companies in the coming years.
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