Despite being Alphabet’s largest acquistion deal yet, the firm’s stock price stuttered amid a range of tensions
Shares of Google parent company Alphabet (NASDAQ:GOOG) were down more than 3% by midday on Tuesday despite the tech giant unveiling its $32 billion acquisition of cloud security firm Wiz.
The deal, Alphabet’s largest to date, is intended to help Google bolster its cybersecurity offering, mitigating against fresh risks posed by the rapid onset of AI and software platforms.
“AI brings new risks, but also new opportunities,” Alphabet CEO Sundar Pichai said during an investor call.
“Organizations are looking for cybersecurity solutions that improve cloud security and span multiple clouds.”
Negotiations between Alphabet and Wiz initially broke down in 2024 after a $23 billion bid was rejected. The freshly-struck deal is now expected to officially close in 2026, subject to regulatory approvals.
GOOG price stutters, highlighting complexities
Despite the confirmation of what is arguably Alphabet’s most ambitious acquisition deal yet, markets reacted unfavorably, with the ‘Magnificent 7’ stock falling nearly 3% from 165.85 at the opening bell to 161.57 by midday.
This could in part be driven by an ongoing antitrust case against Google by the United States Department of Justice. Originally filed last year and reiterated earlier this month, the case accuses Google of being a monopolist and “an economic goliath”, and seeks to force the tech giant to sell off its Google Chrome and Android products.
It remains to be seen whether the case will be upheld under an increasingly pro-corporate Trump regime. Still, for now, investors may be wary about whether such a punishment would compromise the Wiz acquisition deal.
Investors may also be concerned about the steep price paid to acquire Wiz, which increased by a hefty $9 billion after the first bid was rejected last year.
The $32 billion deal is now by far Alphabet’s most expensive acquisition, far outweighing the firm’s $12.5 billion purchase of Motorola in 2012.
It should be noted, however, that broader market sentiment has been negative today. Notably, the Nasdaq Composite, of which Alphabet is part, was down by close to 2% at lunchtime. The S&P 500 suffered similar losses.
