Financial services firm Wells Fargo (WFC) has announced a new digital infrastructure strategy that will combine a multi-cloud approach with third-party data centers to drive technological scalability, agility and speed for its employees and customers.
Shares of the company closed 1.3% higher at $46.64 on Wednesday. Based in California, Wells Fargo offers mortgage, investments, consumer and commercial finance, banking and insurance services.
As part of the strategy, the company has selected Microsoft’s (MSFT) Azure as its primary public cloud provider and Google’s (GOOGL) Cloud to provide additional business-critical public cloud services.
The Head of Technology at Wells Fargo, Saul Van Beurden, said, “Launching our new digital infrastructure strategy is a critical step in our multiyear journey to transform Wells Fargo, making it easier for customers to do business with us and creating a better working experience for our employees.”
Wells Fargo will utilize the Microsoft Azure platform to provide a secure foundation for strategic business workloads and create innovative solutions across all bank functions. Meanwhile, Google Cloud will drive complex artificial intelligence and data solutions, and advanced workloads, thereby allowing Wells Fargo to offer personalized experiences for its clients and customers.
The Chief Commercial Officer of Microsoft, Judson Althoff, said, “By standardizing on the Microsoft cloud and trusting Azure as its most strategic and primary cloud platform across all lines of business, Wells Fargo will be able to advance its key business and technology transformation priorities across core areas like managing risk and control, personalized banking, and the digital branch of the future.”
Additionally, Wells Fargo will transition to a set of third-party-owned data centers, even though it plans to rely predominantly on the public cloud in the longer term. (See Wells Fargo stock chart on TipRanks)
On September 12, Evercore ISI analyst John Pancari reiterated a Buy rating on the stock with a price target of $49 (5.1% upside potential). The analyst expects the company to report earnings per share (EPS) of $1.39 in the third quarter.
Overall, the stock has a Moderate Buy consensus rating based on 7 Buys and 7 Holds. The average Wells Fargo price target of $49.9 implies 7% upside potential. Shares of the company have gained 81.4% over the past year.
According to TipRanks’ Smart Score rating system, Wells Fargo scores an 8 out of 10, suggesting that the stock is likely to outperform market averages.