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Alphabet through Google Cloud has identified a huge gap in the Saudi Arabia cloud infrastructure and intends to fill it despite the impending competition.
As 2020 financial books come to a close and welcome a new year, Alphabet Inc (NASDAQ: GOOGL) has been working on delivering a better financial year despite the ongoing coronavirus pandemic. Google, one of its major subsidiaries, has announced that it will partner with Saudi Aramco to provide cloud services in the region.
“The collaboration taps into rapidly expanding cloud services demand in Saudi Arabia, which is forecast to reach a market opportunity up to $10 billion by 2030,” Aramco said in a statement on Monday.
Hereby, Alphabet shareholders can rest assured the company is venturing into the global market to bolster its future growth prospects. Mind you, Alphabet stocks have received a buy rating from Goldman Sachs’ analyst, Heath Terry.
Apparently, Terry expects Alphabet stocks to gain 30% from the current level, thus a target of around $2250. GOOGL stocks were trading around $1,725 at the time of writing having dropped approximately 0.29% according to the market data provided by MarketWatch.
Notably, Alphabet stocks have rallied approximately 29.03% year to date, and around 22.62% in the past three months. However, they have dropped approximately 2% in the last one month.
Alphabet has a reported market valuation of approximately $1.16 trillion, with 300.64 million outstanding shares. As a result, the company is in a position to invest in global markets as the pandemic presents different opportunities.
Alphabet Stock and Google Cloud-Aramco Partnership
As the coronavirus pandemic continues to significantly reset the global economy, the demand for an efficient cloud network has tremendously grown in the past few months.
Alphabet through Google Cloud has identified a huge gap in the Saudi Arabia cloud infrastructure and intends to fill it despite the impending competition. “The future of Saudi Arabia’s business transformation and growth depends on its ability to successfully leverage cloud services,” Ahmad Al Sa’adi, Aramco’s senior vice president of technical services, said.
The partnership is set to open more avenues for the cloud business in the region. As a result, the Saudi kingdom will significantly benefit as a technological hub while Google widens revenue collection for its parent company.
The kingdom is seeking to diversify its oil dependency into other sectors, and cloud services are viewed as a stepping stone to greater heights.
The talks between Google and Saudi Arabia are said to have begun back in 2018 but stalled following the murder of journalist Jamal Khashoggi. With the partnership inked, alphabet shareholders are optimistic that it will yield positive results in the coming years.