Alphabet’s GOOGL Google Cloud recently bolstered its Kubernetes offerings by launching a new enterprise version of its Google Kubernetes Engine (“GKE”) at a Google Cloud Next event.
GKE Enterprise aids enterprises in complex workload management while running multiple clusters by combining GKE with Anthos, Google’s container platform.
It allows enterprises to manage a fleet of clusters and create a hierarchy of clusters.
GKE Enterprise is designed to address complicated Kubernetes environments as it features security and governance tools and service mesh management.
It also offers a dashboard, which provides an overview of all the workloads running across an enterprise.
Google has infused generative AI technology into GKE through its generative AI-backed helper called Duet AI. This enables users to ask questions on documentation and get answers in simple language.
With the latest move, Google Cloud strives to deliver a highly scalable and managed Kubernetes service to enterprises.
Thus, the move is expected to drive Google’s momentum among various enterprises.
GKE Enterprise will be available in preview from September 2023.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
Kubernetes Holds Promise
Kubernetes, which enables seamless deployment of multiple applications on a single OS and automates various processes such as monitoring, scaling and scheduling of those applications, holds promise with the emerging need for virtual infrastructure.
Rising demand for clustered environments for managing containerized applications remains a plus.
Per a report from SKYQUEST, the global Kubernetes market is expected to reach $9.7 billion by 2030, witnessing a CAGR of 23.4% between 2023 and 2030.
Per a report from Business Research Insights, the market is likely to hit $5.6 billion by 2028, seeing a CAGR of 18.4% between 2022 and 2028.
We believe Google’s growing prospects in this promising market are likely to aid it in winning investors’ confidence.
GOOGL has returned 54% on a year-to-date basis, outperforming the Computer and Technology sector’s growth of 41%.
Wrapping Up
The latest move has added strength to Google Cloud offerings.
Google Cloud, which has become an integral part of Alphabet, reported revenues of $8.03 billion in the second quarter of 2023. The figure accounted for 10.8% of the quarter’s total revenues and exhibited year-over-year growth of 28%.
Our model projects Google Cloud’s 2023 revenues to be $31.44 billion, indicating year-over-year growth of 19.6%.
We believe that strengthening Google Cloud is likely to aid Alphabet’s overall financial performance. This, in turn, is expected to instill investor optimism in the stock.
Our model projects Alphabet’s total 2023 revenues at $300.45 billion, indicating year-over-year growth of 6.2%.
Zacks Rank & Stocks to Consider
Alphabet currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Applied Materials AMAT, Arista Networks ANET and Salesforce CRM. While Applied Materials sports a Zacks Rank #1 (Strong Buy), Arista Networks and Salesforce each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Materials shares have gained 54% in the year-to-date period. AMAT’s long-term earnings growth rate is currently projected at 6.10%.
Arista Networks shares have gained 52.8% in the year-to-date period. The long-term earnings growth rate for ANET is currently projected at 18.75%.
Salesforce shares have gained 59.9% in the year-to-date period. CRM’s long-term earnings growth rate is currently projected at 19.25%.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2023. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Applied Materials, Inc. (AMAT) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
