Google-parent Alphabet has agreed to purchase fast growing, privately held cybersecurity firm Wiz in an all-cash, $32 billion deal, the company said on Tuesday. Google stock fell amid the news as the Nasdaq composite also sold off.
Google upped its offer from $23 billion last year. Talks broke off in 2024 amid concerns over regulatory approval for a deal. The Wiz deal would mark Google's biggest acquisition ever. In addition, Wiz would be part of Google's cloud computing business after the deal closes.
"With Wiz, we believe we will vastly improve how security is designed, operated and automated, providing an end to end security platform for customers to prevent, detect and respond to incidents across all major clouds and code environments," said Google's cloud computing CEO Thomas Kurian in a conference call.
Google Stock: Boost For Cloud Business Vs. Amazon
Google Cloud competes with Amazon Web Services, part of Amazon.com as well as Microsoft's Azure business and Oracle. Wiz's products will continue to be available on AWS, Microsoft's Azure and Oracle, Google said.
Further, Google said it expects the Wiz deal to close in 2026. A Google-Wiz deal could face significant regulatory review.
"Given the fragmentation of the cybersecurity market and Google's non-dominant third place market share in cloud, coupled with the fact this acquisition helps to bolster cybersecurity for Google Cloud Platform, we think that this deal should clear any regulatory hurdles," said Jefferies analyst Brent Thill in a report.
The $32 billion Wiz purchase represents about one-third of Alphabet's total cash and marketable securities on its balance sheet.
Wiz competes with Palo Alto Networks, Zscaler and others. Wiz has been building an end-to-end cybersecurity platform
"If the transaction materializes, it would be one of the largest we've seen within security software, shortly followed by Splunk/Cisco Systems," said JPMorgan analyst Brian Essex in a report.
Google and Palo Alto have had close cybersecurity ties and Palo Alto uses Google's cloud computing platform.
Wiz had about $500 million in annual recurring revenue in 2024, analysts estimates.
On the stock market today, GOOGL stock fell 2.2% to close at 160.67. Alphabet stock has retreated about 16% in 2025.
Also, PANW stock fell 1% to 183.10. ZS stock fell 0.5% to 20.57.
Further, Wiz had shelved plans for an initial public offering until it reached $1 billion in ARR.
Wiz has been backed by Silicon Valley venture capitalists including Sequoia Capital, Andreessen Horowitz, Index Ventures and Greenoaks.
Alphabet paid a high premium, analysts said.
"Assuming $1 billion in ARR over the next 12 to 24 months, we believe Google is paying 30 times ARR," said TD Cowen analyst Shaul Eyal in a report. "Although Microsoft remains the largest cybersecurity vendor, with Wiz's platform, Google is positioning itself for a stronger challenge in the mid market and high-end enterprise spaces."
Google Stock: Mandiant Acquisition
In addition, Wiz has been a share taker in a fast growing cybersecurity market — Cloud Native Application Protection Platform (CNAPP) products and services.
In 2022, Google acquired cybersecurity firm Mandiant for $5.4 billion. Also, Mandiant is recognized worldwide for its prowess in detecting and responding to state sponsored computer hacking attacks. Mandiant is part of Google's cloud computing business.
"The acquisition of Wiz gives Google a much more visible presence in the cybersecurity product space relative to its prior acquisitions for cybersecurity consulting and services," said William Blair analyst Jonathan Ho in a report.
"Also, given Google's broad focus as a company, we believe the acquisition of Wiz helps create an environment and culture more focused on and dedicated to security, which we have seen in the past with acquisitions of cybersecurity players by broader technology vendors. This deal also allows Wiz to receive significant further investment and marketing leverage from Google to continue innovating and growing rapidly."
Google Stock: Technical Ratings
Meantime, Google's Relative Strength Rating currently stands at 49 out of a best-possible 99, according to IBD Stock Checkup. The best stocks tend to have an RS rating of 80 or better. The relative strength line has tumbled.
At a recent Morgan Stanley conference, Alphabet Chief Financial Officer Anat Ashkenazi signaled an openness to dealmaking when she discussed cash allocation.
"When I look at capital allocation priorities, I start with 'How do I make sure that we fund the business appropriately?'," she said. "That has to be the first place where we invest our cash and cash flow, because that is what's going to create a resilient growth profile. And then couple that with M&A. If there are interesting opportunities in areas that we are focused on, certainly we would look at those opportunities. And then the remaining (priority) would be returning cash to shareholders."
GOOGL stock holds an Accumulation/Distribution Rating of C. That institutional ownership rating analyzes price and volume changes in a stock over the past 13 weeks of trading, on an A+ to E scale. Think of C as neutral.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
