Google 'could hit $700 per share' as revenues surge

Google stock could rise as much as 25% to $700 per share, managers say, as the tech giant's latest earnings report showed impressive profit growth.

Google saw a 26% rise in profits in the third quarter, beating analysts' expectations. Revenue jumped 33% to $9.72bn, a fair chunk of which stemmed from its growth in the mobile phone market, accounting for 7% of revenues.

Google shares climbed 6.4% to $594 shortly after the session opened today.

Corman Weldon is manager of the £1.2bn Threadneedle American Select fund, which has a 3.5% position in Google. He said he still sees a further $150 of share price growth in the stock before it becomes fully valued.

"Analysts see Google reaching the $700 range, I agree that would be a reasonable level to start taking profits," said Weldon.

According to Weldon, investors had shown concern over Google's multiple investments in new projects.

"Investors were getting worried, they thought there was no limit and we were never going to see a return from these projects.

"But in today's update, Google indicated it had abandoned a lot of these unsuccessful ventures, which was reassuring," he added.

 Mark Hawtin, manager of the $41m GAM Star Technology fund, said the trading update has not changed his long-term view of the stock, but admitted he has had some concerns over the company's growth rate. He holds roughly 7% of his fund in Google.

With Google adding 2,585 employees in the last quarter and implementing a 10% salary increase across the board, Hawtin is concerned the substantial increase in operating costs could derail top-line growth.

However, the GAM manager is reassured by Google's growth in the mobile space, highlighted in today's update.

"It is not time to take profits yet. Google and Apple still encompass everything that is good about the technology market," he said.