Alphabet Inc. Class A’s (GOOGL) Cloud business is directing its energies towards the burgeoning blockchain business. According to CNBC, Google Cloud is undertaking a massive recruitment drive for its new business line, which will focus on blockchain applications in retail, healthcare, and other industries wherein customers are increasingly adopting blockchain technologies.
Shares of the technology behemoth spiked more than 2.6% on the news and ended the day almost flat at $2,580.10 on January 27.
Hiring Blockchain Specialists
Google has predominantly focused on advertising as a source of revenue and is now taking steps to diversify its business into more lucrative segments. Google is making efforts to gain market share in its computing and cloud storage businesses.
The blockchain business, which thrives on the concept of decentralization, is gaining huge momentum. Google’s cloud marketplace already offers tools that developers can use to make their own blockchain networks. The unit also has blockchain customers including Dapper Labs, Hedera, and Theta Labs, along with exchanges.
Google’s efforts are now directed towards services for developers in the blockchain space. To assist the developers, Google is hiring experts from the blockchain arena who will channelize their expertise towards the company’s goal of increasing decentralization.
Richard Widmann, head of strategy for digital assets at Google’s cloud unit, said, “Things we can do to reduce the frictions some customers have with respect to paying for centralized cloud utilizing cryptocurrencies… Foundations and other entities engaged in development in the world of digital assets are mainly capitalized with cryptocurrencies.”
Last week, the company also announced that Shivakumar Venkataraman, an engineering VP for Google, would lead the blockchain unit. Moreover, Google’s YouTube announced non-fungible tokens (NFT) integration for video creators.
Ahead of Google’s upcoming earnings scheduled for February 1, 2022, Guggenheim analyst Michael Morris lowered the price target on the stock to $3,000 (16.3% upside potential) from $3,400, and maintained a Buy rating.
With 13 Buys, the stock commands a Strong Buy consensus rating. The average Alphabet Class A price target of $3,431.15 implies 33% upside potential to current levels.
TipRanks’ Stock Investors tool shows that investor sentiment is currently Very Positive on Google, with 2% of portfolios tracked by TipRanks increasing their exposure to GOOGL stock over the past 30 days.
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