In a joint statement on Tuesday, Deutsche Bank CEO Christian Sewing said, “The partnership with Google Cloud will be an important driver of our strategic transformation.”
The companies intend to close the deal in the coming months but they are not publicizing the exact amounts of the arrangement or how much it is expected to yield. According to Bloomberg, Google’s deal will make the German lender a cumulative investment return of $1.1 billion, stating that the two companies plan to make dual investments in technology while also sharing the revenue results.
“We’re excited about our strategic partnership and the opportunity for Google Cloud to be helpful to Deutsche Bank and its clients as they grow their business and shape the future of the financial services industry,” said Sundar Pichai, CEO of Alphabet.
With Google winning the Deutsche contract after a 3-month bidding process, it added its third bank to the Google Cloud portfolio. The other major banks include HSBC Holding Plc (HSBC) and the UK bank, Lloyds Banking Group PLC (LYG) which signed a 5-year contract with Google in March. Microsoft’s Azure and Amazon Web Services have been the industry leaders in cloud computing, attracting the lion’s share of the financial sector for enterprise-level cloud deployment.
Needham analyst Laura Martin assigned a Buy rating on the stock today with a price target of $1800 implying 20% upside noting that “Google is the dominant search engine” in the U.S. and Europe with global shifts in advertising benefiting the company. She added, “Risks to our price target include COVID-19's impact on consumer spending and ad spending growth.”
Google’s stock is up 12% year-to-date with 29 analysts assigning Buy ratings, 2 with Hold ratings, and no Sell ratings which altogether results in a Strong Buy consensus. The average analyst price target stands at $1527.66 (2% upside potential). (See Google's stock analysis on TipRanks).
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