Google Recruits Windsurf CEO Amid Acquisition Halt, Bolsters AI Capabilities

Google (GOOG) is recruiting Windsurf CEO and employees amid acquisition halt. This move aims to enhance AI capabilities and mitigate potential legal complications. Based on analyst estimates, GOOG's average one-year price target is $202.67, with an 11.78% upside from the current price. The average brokerage recommendation is 1.6, indicating "Outperform" status. The estimated GF Value for GOOG in one year is $201.53, suggesting an 11.15% upside from the current price.

Google (GOOG) has made a strategic move to bolster its AI capabilities by recruiting key talent and licensing technology from AI-coding startup Windsurf, despite an acquisition halt. This move is part of a growing trend of "reverse-acquihires," where major tech firms hire top talent and license technology without acquiring the entire company. The deal, announced on July 11, 2025, marks a significant step for Google in the rapidly evolving AI coding landscape.

According to TechCrunch [1], Google DeepMind has hired Windsurf's CEO Varun Mohan, co-founder Douglas Chen, and several key engineers. The deal does not involve Google acquiring Windsurf but rather securing a non-exclusive license to certain technologies. This move is expected to significantly enhance Google's ability to build AI coding tools, as the company aims to stay competitive in the AI race.

Windsurf, which reached a $100 million annual recurring revenue (ARR) in April 2025, had attracted major suitors due to its rapid growth. The startup's technology has been in high demand, with companies like OpenAI and Google vying for its capabilities. However, OpenAI's $3 billion bid to acquire Windsurf reportedly fell apart due to contract renegotiations with Microsoft, which already holds access to OpenAI's intellectual property [2].

Following the leadership exits, Jeff Wang, Windsurf's head of business, has stepped in as interim CEO. Most of the 250-person team will continue focusing on enterprise AI coding tools, but the company's long-term trajectory remains uncertain. Similar reverse-acquihire startups like Scale AI and Inflection have struggled to maintain momentum post-deal.

Alphabet Inc. (GOOGL) has received a raised price target of $220 from Oppenheimer, up 10% from the previous $200 target. The investment firm maintained its "Outperform" rating on the stock. The average one-year target price from 18 analysts is $201.56, with a high estimate of $225.00 and a low of $185.00, indicating a 15.07% upside. The new target reflects strong consumer adoption of Alphabet's AI Mode and a positive valuation outlook for its self-driving unit, Waymo [3].

Alphabet's stock price rose by 0.57% to $177.62 on July 2, 2025, with 383,000 contracts exchanged in options trading. Call options led the way, resulting in a put/call ratio of 0.48. Implied volatility decreased to 36.21, indicating a modest bullish outlook. Analysts forecast an average target price of $201.56, with a 12.79% upside from the current price. The estimated GF Value is $201.53, suggesting a 12.78% upside [4].

The investment community will be closely monitoring the performance of Alphabet Inc. in its forthcoming earnings report. The company is predicted to post an EPS of $2.12, indicating a 12.17% growth compared to the equivalent quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $78.95 billion, up 10.65% from the prior-year quarter. For the full year, the Zacks Consensus Estimates project earnings of $9.53 per share and a revenue of $326.75 billion, demonstrating changes of +18.53% and +10.72%, respectively, from the preceding year [5].

References:
[1] https://techcrunch.com/2025/07/11/windsurfs-ceo-goes-to-google-openais-acquisition-falls-apart/
[2] https://tribune.com.pk/story/2555453/openai-left-behind-as-windsurfs-stars-defect-to-google-deepmind
[3] https://www.proactiveinvestors.co.uk/companies/news/1074441/alphabet-price-target-raised-on-strong-ai-adoption-waymo-valuation-1074441.html
[4] https://stockanalysis.com/stocks/googl/
[5] https://finance.yahoo.com/news/alphabet-googl-declines-more-market-214504829.html