Alphabet (GOOG, Financial) shares dropped 3% to a six-month low amidst a broader market sell-off and a lukewarm response to its $32 billion acquisition of cybersecurity startup Wiz. Initially, Wiz turned down Google's $23 billion offer last year, which would have been Google's largest acquisition to date.

Wiz, instead of joining Google last year, aimed to go public, targeting $1 billion in annualized recurring revenue (ARR) by the end of 2025. Regulatory challenges were significant, especially for Google, which faced an antitrust ruling over its search monopoly. In January, the Department of Justice blocked Hewlett Packard Enterprise's (HPE, Financial) $14 billion acquisition of Juniper Networks (JNPR, Financial), signaling potential obstacles for Google's Wiz acquisition.

• Reasons to Support Google's Wiz Acquisition:
• Wiz specializes in cloud security, offering a competitive edge with $500 million in ARR as of last July, despite being founded only four years ago. It was the fastest startup to reach $100 million in ARR.
• Wiz collaborates with major hyperscalers like Amazon (AMZN, Financial) and Microsoft (MSFT, Financial), showcasing its robust cybersecurity technology. With rapid revenue growth, Google aims to secure the deal before valuations rise further. Wiz was valued at around $16 billion last year.
• Acquiring Wiz positions Google as a significant player in cybersecurity. With Google's R&D and AI capabilities, Wiz's tools could see enhanced growth.

Despite the strategic advantages, Google's 32x estimated ARR valuation for Wiz is a substantial premium. Regulatory issues could jeopardize the deal, and ongoing market volatility might deter investors from Alphabet until economic conditions stabilize, maintaining selling pressure.