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Alphabet (GOOGL) Expands Cybersecurity Offerings Via Mandiant

·4 min read

Alphabet’s GOOGL division Google completed the acquisition of Mandiant, a provider of cybersecurity services.

Mandiant offers advanced capabilities and threat intelligence services that help organizations combat cyber-attacks. GOOGL is known as one of the first responders in combating some of the world’s largest cybersecurity incidents.

On the back of the latest acquisition, Google expanded its portfolio of cybersecurity solutions.

Moreover, Mandiant’s services are widely used by enterprises and organizations across 22 countries. Hence, the underlined buyout is likely to aid Google in gaining momentum in the global cybersecurity market.

Reportedly, Mandiant will join Google Cloud. The acquisition is expected to strengthen Google’s cloud business, which in turn, will contribute well to Google Cloud revenues.

Google Cloud generated $6.3 billion, accounting for 9% of total second-quarter 2022 revenues. Revenues increased 35.6% from the prior-year quarter’s level.

Alphabet Inc. Price and Consensus

Alphabet Inc. Price and Consensus
Alphabet Inc. Price and Consensus

Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote

Growing Cybersecurity Efforts to Boost Prospects

We note that the latest buyout bodes well for Google’s strengthening efforts toward bolstering cybersecurity offerings.

Apart from the Mandiant buyout, Alphabet acquired a leading provider of security orchestration, automation and response named Siemplify to help business organizations better manage their threat response.

Google Cloud’s robust security solutions portfolio, including BeyondCorp Enterprise, VirusTotal and Chronicle’s planet-scale security analytics and automation tools, remains noteworthy.

All these endeavors are expected to position Google well in capitalizing on the prospects in the booming cybersecurity market.

The market is witnessing significant growth owing to the increasing number of e-commerce platforms and the growing usage of machine learning, IoT and cloud. Growing investments in Internet security solutions by government organizations are also driving the market.

Increasing demand for online learning and hybrid working amid the coronavirus pandemic is consistently leading organizations to adopt cybersecurity platforms. This, in turn, is creating growth in the underlined market.

Per a ReportLinker report, the global cybersecurity market is expected to reach $266.2 billion by 2027 from $173.5 billion in 2022, witnessing a CAGR of 8.9% between 2022 and 2027.

Google’s strengthening presence in the aforesaid market will further help its parent Alphabet win investors’ confidence in the near and the long term.

Shares of Alphabet have been down 23.5% in the year-to-date period, outperforming the Computer and Technology sector’s decline of 27.1%.

Competitive Scenario

Given the upbeat scenario in the global cybersecurity market, apart from Google, other major companies like Microsoft MSFT and Amazon AMZN are consistently making efforts to provide enhanced data and Internet protection services.

Microsoft is consistently gaining momentum in the cybersecurity space with its growing portfolio of security solutions. Further, its cloud computing arm Microsoft Azure is equipped with enhanced data-protection capabilities as it rapidly identifies threats and accordingly takes quick action. MSFT has lost 27.8% in the year-to-date period.

MSFT recently announced plans to acquire Miburo, a cyber-threat analysis and research start-up. As part of the agreement, Microsoft will use Miburo’s cybersecurity tech to partner with other companies in the public and private sectors to find solutions that keep customers safe online.

Shares of Amazon have been down 18.1% in thesame time frame. Amazon’s cloud platform Amazon Web Services offers a wide range of security services and features, including encryption, key management and identity as well as access management. AMZN’s open-source AWS Secure Environment Accelerator feature helps government organizations deploy and operate multi-account AWS environments securely. This is a positive for AMZN.

Additionally, the retail giant introduced two cybersecurity initiatives, namely Amazon Security Awareness and Multi-Factor Authentication, to educate individuals and business organizations about cybersecurity and protect them from cyberattacks.

Nevertheless, Google’s increasing strategic acquisitions in the cybersecurity field are likely to give tough competition to the above-mentioned peers.

Zacks Rank & Stock to Consider

Currently, Google’s parent Alphabet carries a Zacks Rank #3 (Hold). Investors interested in the broader Zacks Computer & Technology sector can consider a better-ranked stock like ASE Technology ASX, carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ASE technology has lost 27.4% in the year-to-date period. The long-term earnings growth rate for ASX is currently projected at 23.1%.

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