Google Inc. broke several records on Friday when the stock closed at an unprecedented high of $669.62 which in turn added the biggest one day gain in market capitalization of $66.9 billion for the company.
Google (GOOGL, +16.26% GOOG, +16.05%) lifted off with a 16.3% increase, recording the company’s biggest one day gain percentage-wise since April 2008. The price escalation resulted in the market cap reaching $478 billion. This figure is larger than the GDP of countries such as Belgium, which at 26 on the world GDP rankings comes in at $464 billion.
The Google market cap gain alone is also bigger than the total market cap of 400 of the companies in the S&P 500 index (SPX), although it is still in some way below the Apple market cap of $746.7 billion, with analysts saying we need to watch this space.
The one day gain recorded by Google does however push the Apple one day gain record set on the 25th of April 2012 into third place behind the Cisco Systems’ $66.1 billion gain set on 17 April 2000. The Cisco price rise was however before the crash in high tech stocks which included wiping 86% off Cisco’s market cap, while the total market cap fell by $5 trillion from March 2000 to October 2002.
The record breaking stock performance comes on the back of exceptional quarterly results that eclipsed Wall Street expectations. In the words of J.P. Morgan analyst Doug Anmuth, “Google hasn't delivered a quarter like this in a long time” while reiterating his outperform rating for Google stock.
The 12 month target for Google stocks was raised to $800 on Friday morning by J.P. Morgan, Bernstein Research, Nomura Research, Jefferies and Evercore. That price would result in a Google market cap of $547 billion, making it only the second company after Apple to record a market cap exceeding the half trillion dollar threshold.
The average price target for Google coming out of a FactSet survey among 40 analysts is $711.62.
The majority of analysts were favorably impressed by comments from Google’s new, CFO Ruth Porat, on reducing expenses. She also hinted that there might be capital returns in the future underscoring the company’s commitment to improving its margins while at the same time delivering value to shareholders.
MT4 Chart: Google