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Google Cloud worth $225B, Deutsche Bank says

(Bloomberg) --Alphabet Inc.’s cloud business alone is now worth $225 billion, Deutsche Bank analysts led by Lloyd Walmsley wrote in a note.

The unit could report compound annual growth of 55% between 2018 and 2022, and reach annual sales of about $38 billion by 2025, the analysts wrote.

“While Google Cloud has been lagging behind in the market and burning money historically, with increased confidence in the go-to-market and commercial traction under Mr. Kurian, we think it can grow market share,” they wrote. Former Oracle Corp. executive Thomas Kurian was named head of the division in November.

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The value ascribed by Deutsche Bank to Google Cloud is nearly twice the market value of IBM, which reported cloud revenue of $19.2 billion in 2018, at the close of trading on Wednesday, Bloomberg data show.

Deutsche Bank, which has a buy rating on Alphabet, raised its price target on the company to $1,600 a share, higher than any of the 45 analysts surveyed by Bloomberg. Alphabet shares were up 0.2% to $1,180 a share in pre-market trading.

--With assistance from James Cone