Tech giant Google (GOOGL) and cybersecurity firm Palo Alto Networks (PANW) have expanded their partnership with what’s reportedly Google Cloud’s biggest security services deal yet. According to a source cited by Reuters, Palo Alto has committed to spending nearly $10 billion on Google Cloud services over several years. While neither company confirmed the exact value, the deal includes migrating Palo Alto’s current tools to Google’s cloud and investing in new artificial intelligence-based services.
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Palo Alto President BJ Jenkins noted that much of this spending will support the development of AI-powered offerings, which are becoming increasingly important in cybersecurity. Separately, Matt Renner, Google Cloud’s Chief Revenue Officer, explained that AI has created a surge in demand for security. Still, the use of AI in cybersecurity is just beginning, with Jenkins comparing it to the early days of cloud computing, when new threats began to appear.
As cyberattacks grow more complex, sometimes even using generative AI tools, both companies are investing heavily to stay ahead. Indeed, Google’s $32 billion acquisition of security startup Wiz is awaiting regulatory approval, while Palo Alto has already launched AI tools and announced plans to acquire Chronosphere for $3.35 billion.
Which Stock Is the Better Buy?
Turning to Wall Street, out of the two stocks mentioned above, analysts think that Palo Alto stock has more room to run than Google. In fact, Palo Alto’s price target of $232.87 per share implies almost 25% upside versus Google’s 6%.
