Motley Fool Money: Alphabet’s $32 Billion Cybersecurity Play
Episode Release Date: March 18, 2025
Hosts: Dylan Lewis, Ricky Mulvey, Mary Long

Introduction

In this episode of Motley Fool Money, hosts Ricky Mulvey and guest Jason Moser delve into Alphabet Inc.'s monumental $32 billion acquisition of Wiz, a leading cloud security company. The discussion navigates through the strategic implications of this deal, Alphabet's positioning in the cloud computing space, the broader cybersecurity investment landscape, and insights into the electric vehicle (EV) market with a focus on BYD's groundbreaking battery technology. The conversation also touches upon the evolving intersection of investing and gambling through platforms like Robinhood.

Alphabet's $32 Billion Acquisition of Wiz

Ricky Mulvey opens the discussion by highlighting Alphabet's decision to increase its acquisition offer for Wiz from an initial $22 billion last summer to $32 billion this year. Reflecting on the deal's escalation, Mulvey remarks:

"[...] you have to think this was an expensive, you know, it must have been painful for Google to hold it this long."
— Ricky Mulvey [00:22]

Jason Moser concurs, suggesting that Wiz held significant leverage in the negotiations:

"Wiz was in a position of power here because Google clearly wants this company, wanted it back then, wants it now."
— Jason Moser [00:48]

Moser emphasizes Alphabet's strategic intent behind the acquisition, noting Wiz's robust capabilities in cloud security, which are crucial for protecting data in complex, multi-cloud environments.

Impact on Alphabet’s Cloud Business

Mulvey and Moser discuss how this acquisition aligns with Alphabet's ambitions to bolster its cloud services. Mulvey explains:

"Alphabet trying to build up its cloud business. And Wiz plays in the space of if you have data that's on the cloud..."
— Ricky Mulvey [01:40]

Jason Moser elaborates on Alphabet's competitive positioning:

"When you look at the evolution of this space, this speaks to, I think, how quickly we saw companies like Amazon and even Microsoft ramping up their cloud strategies."
— Jason Moser [03:57]

Despite Alphabet's significant cash reserves—approximately $100 billion—this all-cash deal underscores their commitment to expanding their cloud infrastructure, a sector where they have historically lagged behind giants like Amazon Web Services (AWS) and Microsoft Azure. Moser acknowledges Alphabet's growth in cloud revenues from $9 billion in 2019 to $43 billion in 2024, indicating a positive trajectory influenced by strategic acquisitions like Wiz.

Cybersecurity Investment Strategies

Transitioning to the cybersecurity landscape, Mulvey inquires about investment avenues within this sector. Jason Moser advocates for ETFs as a prudent approach for those outside the cybersecurity domain:

"I love the ETF perspective when it comes to this. That approach I think works very well."
— Jason Moser [06:59]

He recommends options like the First Trust NASDAQ Cybersecurity ETF, which has seen substantial growth over the past five years. Additionally, Moser mentions leading companies in the space—Crowdstrike, Cloudflare, Zscaler, and Palo Alto—as potential individual investment opportunities for those seeking direct exposure.

BYD’s Revolutionary Battery Technology and Its Impact on EVs

The conversation shifts to the automotive sector with a focus on BYD's latest innovation: a battery capable of delivering a 250-mile range with a mere 5-minute supercharge. Mulvey poses the question of whether this advancement is merely a technological gimmick or a transformative milestone for electric vehicles:

"Is the time to plug in is pretty close to the time it takes to fill up a combustion engine with regular gasoline."
— Ricky Mulvey [08:37]

Jason Moser underscores the significance of this development in alleviating "range anxiety," a common concern among EV users:

"Reducing those charging times could have a very material impact on the upside for, for all of these EV companies."
— Jason Moser [09:25]

Mulvey highlights BYD's impressive market valuation of $162 billion, surpassing traditional automakers like Ford, General Motors, and Volkswagen combined:

"The company does not sell cars in the United States anyway. This is now a company that is worth more than Ford, General Motors and Volkswagen combined."
— Ricky Mulvey [09:44]

Moser attributes BYD's premium valuation to market optimism regarding its leadership in EV technology and growth trajectory, despite the need to approach some statistics with caution.

Robinhood’s Prediction Markets and the Future of Sportsbooks

In a brief segment, Mulvey brings up Robinhood's latest venture into prediction markets, facilitated through a partnership with Kalshi. This move allows users to bet on various events, from federal fund rates to March Madness outcomes. The discussion questions the potential impact on established sportsbooks like FanDuel and DraftKings:

"Do you think this is a real problem for your sports books like FanDuel, owned by Flutter Entertainment and DraftKings?"
— Ricky Mulvey [13:14]

Jason Moser suggests that while Robinhood's prediction markets introduce new competition, they may also prompt sportsbooks to innovate and expand their offerings to retain user engagement:

"These are a bit different. [...] Incorporating this sort of prediction market app into Robinhood, it's interesting, but I think it could be even more interesting for the potential for these sports books to evolve."
— Jason Moser [15:21]

Furthermore, the conversation touches upon the blurred lines between investing and gambling, with Moser expressing concerns over conflating the two, especially for novice investors:

"I do not like equating the two. [...] Bringing these two under the same platform can send mixed messages..."
— Jason Moser [17:16]

Conclusion

As the episode wraps up, Mulvey hints at upcoming segments addressing listener questions on financial topics, ensuring that the content remains valuable for both seasoned investors and those seeking foundational financial advice. The discussion underscores Alphabet's strategic maneuvers in the cloud and cybersecurity arenas, the transformative potential of advancements in EV technology, and the evolving landscape of investment platforms intersecting with gambling.

Notable Quotes with Timestamps

• Ricky Mulvey [00:22]:
  "This was an expensive, you know, it must have been painful for Google to hold it this long."

• Jason Moser [00:48]:
  "Wiz was in a position of power here because Google clearly wants this company, wanted it back then, wants it now."

• Ricky Mulvey [01:40]:
  "Alphabet trying to build up its cloud business. And Wiz plays in the space of if you have data that's on the cloud..."

• Jason Moser [03:57]:
  "When you look at the evolution of this space, this speaks to, I think, how quickly we saw companies like Amazon and even Microsoft ramping up their cloud strategies."

• Jason Moser [06:59]:
  "I love the ETF perspective when it comes to this. That approach I think works very well."

• Ricky Mulvey [08:37]:
  "Is the time to plug in is pretty close to the time it takes to fill up a combustion engine with regular gasoline."

• Jason Moser [09:25]:
  "Reducing those charging times could have a very material impact on the upside for, for all of these EV companies."

• Ricky Mulvey [09:44]:
  "This is now a company that is worth more than Ford, General Motors and Volkswagen combined."

• Jason Moser [15:21]:
  "Incorporating this sort of prediction market app into Robinhood, it's interesting, but I think it could be even more interesting for the potential for these sports books to evolve."

• Jason Moser [17:16]:
  "I do not like equating the two. [...] Bringing these two under the same platform can send mixed messages..."

This comprehensive summary encapsulates the key discussions from the episode, providing listeners with valuable insights into Alphabet's strategic investments, the dynamic cybersecurity sector, innovations in the EV market, and the convergence of investing and gambling platforms.