Surge in Google Shares as mobile advertising give investors hope

Surge in Google Shares as mobile advertising give investors hope

Google shares reached an all-time high on Friday closing at 16.26 percent with this high tech company adding about $60 billion to its market value. Investors were cheering the profit figures which indicated a strong growth in mobile advertising and YouTube arm.

The rise in the market size of the company to over $400 billion brings it second to Apple which is currently at $745 billion. This implies that Sergey Brin and Larry Page, the co-founders of Google made profit worth $4 billion in a day- (follow the link for more information).

Shareholders had the first opportunity to trade the stock of the company after the release of the second-quarter, steller results. After trading on Thursday, Google announced that its revenue had reached $14.35 billion with profit of $6.99 per share.

The current surge in the price of the stock of this company implies that investors are confident that Google has finally reached the peak of mobile advertising. This has always been the shaky area for this high tech giant.

Currently, the search engine of this company remains the most dominant globally in terms of desktop computer searches. However, the firm faced mounting competition because people are increasingly using tablets and smart phones. Due to the smaller screens of these devices, consumers have been considering other searching apps like using Amazon to search for shoes rather than using Google directly- (follow the link for more information).

The current earnings by Google beat the expectations of analysts following its Thursday’s report. According to Ruth Porat, the chief of finance, spending on YouTube video streaming and mobile advertising indicates that mobile advertising is growing.

Ruth added that there are more than a billion users of YouTube. People who mainly use YouTube are aged between 18 and 49 years. These use their mobile devices to watch YouTube videos and their number is higher than that of those who watch cable television.

According to Reuters, a minimum of 27 broking companies raised their targets for the price of Google shares. One company predicted that the price of the stock could go up to $800.

Google added $50 billion following the rise in the shares while opening the market on Friday. Eventually, the stock closed at $699.62, which was $97.84 higher.

This rise enabled Nasdaq index, which is rich in tech companies where Google is also listed tp close with a record high during the second season with over 0.9 percent. A research note was issued by Deutsche bank on these profit figures known as “Dawn of the new era”. The bank added that this feels like it is a new era.

However, Google’s gain entirety will not appear in S&P 500 because some of the Google’s shares are currently internally held. Thus, not all shares are floating freely. Google has an index float of 0.8 while Apple’s index float is 1. This means that the float-weighted index of Google includes 84 percent of its total gains only.

However, if the market wealth of Google was put in the S&P 500 separately, the company would be the 94th largest firm in S&P 500- (follow the link for more information).


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