Google Cloud Forges Multi-Year Deal With Renault

Alphabet Inc.’s Google (GOOGL) has secured a major boost for its Google Cloud division with a multi-year agreement to house Renault SA’s (RNLSY) manufacturing data.

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In a report by Bloomberg on July 9, the deal will have Google providing its cloud-computing capabilities to the French automaker’s various manufacturing divisions. Both businesses have not disclosed the deal’s amount nor the specific length of the agreement but Alphabet refers to the contract as the “largest of its kind globally” and its first deal for Google Cloud in France.

Google Cloud CEO Thomas Kurian said in an interview with Bloomberg, “We believe that manufacturing companies need a new platform to complement the assembly lines, the supply chains and other systems they already have.” He added, “The Renault contract offers a chance to improve manufacturing processes, industrial automation and adapted controls.”

Kurian said that the agreement will have no overlap with Alphabet’s advertising unit and self-driving division Waymo. Additionally, he assured that no data will be going to the search giant’s other units.

Renault Director of Manufacturing and Logistics José Vicente de los Mozos stated, “This agreement and the commitment of our IT teams will allow us to accelerate the deployment of our Industry 4.0 plan designed to transform and connect our production sites and logistics processes around the world to improve our standards of excellence and performance.”

Adding the automaker to its cloud computing clientele represents another recent win for the Google Cloud portfolio. On July 8, GOOGL forged a 10-year agreement with Deutsche Bank AG (DB) to provide its enterprise-level services. Germany’s largest lender is the third client that the company will be servicing from the financial sector.

Monness analyst Brian White on July 6 reiterated a Buy rating on GOOGL and a price target of $1420 (implying 6% downside) but cut Q2 earnings estimates, noting the growing global privacy initiatives along with the spread of COVID-19.

On July 7, Needham analyst Laura Martin lowered the company’s Q2 revenue after the market research company, eMarketer projected that Google-search revenue will decline in 2Q and 2020. Martin said, “We lower our Alphabet Q2 revenue estimate down to 7% year-over-year.” She assigned a Buy rating on Alphabet’s stock and a price target of $1800 which implies 20% upside.

Google is up 12% year-to-date with 28 analysts assigning Buy ratings, 2 with Hold ratings, and no Sell ratings which altogether results in a Strong Buy consensus. The average analyst price target stands at $1531.50 suggesting 2% upside potential. (See Google’s stock analysis on TipRanks).