It's been a turbulent year for cybersecurity company CrowdStrike (CRWD -3.43%) Last July, a glitch was identified during an update to CrowdStrike's software -- ultimately resulting in widespread outages across the world for many of its customers.

Reputational damages and frustrated customers were some of the more obvious near-term headwinds the company had to face. Over the last several quarters, CrowdStrike has moved on from its IT disaster with little noticeable harm.

I say this because the company, by most accounts, looks OK considering how detrimental this problem could have become. However, a more thorough review of the financials may suggest CrowdStrike is at a crossroads.

Revenue growth is beginning to show some signs of deceleration, and an intense competitive landscape in the cybersecurity industry doesn't necessarily bode well for investor confidence.

With that in mind, Google, a subsidiary of internet behemoth Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), just shook things up in the cybersecurity market with a pretty interesting move.

Let's dig into Google's playbook and assess if the company just made a checkmate move against CrowdStrike.

What did Google just do?

Alphabet is primarily affiliated with two internet brands: search platform Google and video-sharing website YouTube. In addition to these assets, Alphabet also has a workplace productivity suite similar to that of Microsoft Office, as well as a budding cloud computing business.

Alphabet has also been quietly making moves in cybersecurity. Back in 2022, Google shelled out a combined $5.9 billion to acquire cybersecurity companies Siemplify and Mandiant. Interestingly, the company has integrated both of these security businesses into the Google Cloud Platform, which is now growing faster than Alphabet's legacy advertising business, as well as its subscription services division.

Earlier this month, Google doubled down on its cybersecurity playbook following a $32 billion acquisition of Wiz. Of note, this deal represents the largest reported price for an acquisition made by Google.

Image source: Getty Images.

Does this deal make sense?

Since Wiz is a private company, it's hard to know for sure just how big it is. Last summer, there was some talk that Google approached Wiz about an acquisition but the negotiations apparently fell through. At the time, Wiz was rumored to be generating around $500 million in annual recurring revenue (ARR). According to more recent reports, Wiz's ARR is now closer to $700 million.

Using these figures as estimates, this implies that Google shelled out between 45 times and 64 times ARR to acquire Wiz.

To put this into perspective, let's look at CrowdStrike's financials.

As of the company's fiscal 2025 year end (period ended Jan. 31), CrowdStrike boasted $4.2 billion in ARR. With a current market capitalization of $91.3 billion, CrowdStrike is trading for approximately 21.7 times ARR. In other words, CrowdStrike's ARR is about sixfold compared to Wiz but its valuation multiple is much more protracted.

In my eyes, Google may have overpaid for Wiz.

Should CrowdStrike investors be concerned?

The deal between Wiz and Google comes at an interesting time for a couple of reasons. First, CrowdStrike is likely going to continue battling some brand fatigue despite the outage being almost a year ago at this point.

However, considering the price tag attached to the Wiz acquisition, I think Wall Street is likely going to place some heavy scrutiny on Google. More specifically, Google now has some pressure to integrate Wiz into its cloud business quickly and begin monetizing Wiz in tandem with Siemplify and Mandiant.

Second, CrowdStrike operates at the intersection of cybersecurity and artificial intelligence (AI) -- both of which are expanding market opportunities. It's interesting to see Google swoop in and acquire Wiz now as demand for both enhanced security protocols and AI software continues to rise.

To me, Wiz and Google will be spending quite a bit of time with deal-closing procedures (i.e., regulatory approvals), as well as administrative things such as organizational integrations and complementing the Wiz product suite with Google's existing cybersecurity services. These distractions could provide CrowdStrike with a unique opportunity to capitalize on strong market dynamics in the cybersecurity arena and move faster than its competition.

At the end of the day, I think the Wiz-Google acquisition could actually serve as a catalyst and benefit CrowdStrike. Overall, I don't see Google's deal as a checkmate move against CrowdStrike.