The negotiations between Google’s parent company, Alphabet (GOOG) (GOOGL), and Israeli cybersecurity firm Wiz for a potential $23 billion acquisition have collapsed. This marks a setback for what would have been the largest acquisition in Google’s history.
If the acquisition had been completed, it would have bolstered Google’s cloud computing capabilities, an area where it lags behind Amazon (AMZN) and Microsoft (MSFT).
The deal’s failure could be due to possible antitrust concerns around Google. The company is already facing legal challenges from the U.S. Department of Justice regarding its dominance in online search and ad-tech practices.
Wiz Opts for the IPO Path
After the talks fell apart, Wiz CEO Assaf Rappaport announced the company’s intention to pursue an initial public offering (IPO). He cited Wiz’s strong growth and appealing offers as reasons for going public. The company aims to reach $1 billion in annual recurring revenue (ARR) before the IPO.
Currently, Wiz is generating $500 million in ARR and aims to double that within a year, setting the stage for a potential IPO in the coming years.
Is It a Good Time to Buy GOOGL?
It should be noted that the news of the deal falling apart came ahead of GOOGL’s Q2 results, scheduled for release today.
Despite legal troubles, Wall Street analysts are optimistic about Alphabet’s prospects. The company is well poised to benefit from strength in the search business, ad revenue recovery, and AI-driven new offerings.
GOOGL stock has received 33 Buy and six Hold recommendations for a Strong Buy consensus rating. The analysts’ average price target on Alphabet stock of $202.80 implies an upside potential of 11.63% from the current levels. Shares of the company have witnessed year-to-date growth of 30.2%.
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