Google Acquires Wiz for a Massive $32 Billion

Google (GOOGL) has sealed the deal to buy Wiz, an Israel- and New York-based cybersecurity company, for $32 billion. That’s the largest deal ever made for an Israeli tech company.

Last summer, the deal was on the table for close to $23 billion, but the negotiations crumbled due to regulatory concerns. Now, the deal has returned with an even higher price.

How Can Google Buy Wiz Now?

According to Lucid Capital, a fund manager specializing in technology, the changing of the guard at the FTC re-opened the possibility of this deal. Lina Khan, the Commissioner of the FTC (Federal Trade Commission) under former President Biden, was known for her fierce opposition to monopolies, and would have been likely to challenge this acquisition. In contrast, the current FTC chairman, Andrew N. Ferguson, announced that he would not force any Big Tech deals to go to court to defend their plans.

For its part, Google contends that it currently has almost no cybersecurity business, so buying Wiz does not contradict any monopoly laws.

Is Google in Trouble?

Lucid Capital believes that the size of this acquisition speaks volumes about Google’s troubles. For one, its cloud activity lags behind those of Microsoft (MSFT) and Amazon (AMZN). Each of those companies’ cloud platforms has a unique advantage: MSFT has the benefit of OpenAI, and AMZN has open source models. Bringing in Wiz and its cybersecurity expertise will give Google’s cloud some needed differentiation from its competitors.

Furthermore, according to Lucid, Google’s ad tech superiority is being challenged by Perplexity, OpenAI, and Meta’s growing capabilities. Specializing in cybersecurity will give Google a needed edge.

Is Google Still a Good Buy?

According to analysts, Google stock is a Moderate Buy, with 25 Buy ratings and 11 Hold ratings given by analysts in the past 3 months. The analyst consensus 12-month price target on Google stock is $215.59, implying an upside of 31.23%. Google stock has fallen 13/11% year-to-date.