Google's stock price topped $800 for the first time Tuesday amid renewed confidence in the company's ability to reap steadily higher profits from its dominance of Internet search and prominence in the increasingly important mobile device market.
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SAN FRANCISCO — Google Inc.’s stock price topped $800 for the first time Tuesday amid renewed confidence in the company’s ability to reap higher profits from its dominance of Internet search and prominence in the growing mobile market.
The milestone occurs more than five years after Google shares first hit $700. Not long after it broke that barrier in October, 2007, the economy collapsed into the worst recession since World War II and Google stock tumbled into a long malaise, which led to a change in leadership.
Google’s stock climbed $13.96, or 1.8 percent, to close Tuesday at $806.85.
Besides enriching Google employees and other shareholders, the resurgent stock is an implicit endorsement of co-founder Larry Page. He replaced his managerial mentor, Eric Schmidt, as chief executive officer in April, 2011. Google’s stock has risen 36 percent since Mr. Page took over. By contrast, the benchmark Standard & Poor’s 500 index has climbed 15 percent in the same stretch.
Most of Google’s gains have occurred in seven months, overlapping with a downturn in the stock price of rival Apple Inc. The iPhone maker’s market value has plunged $230 billion, 35 percent, since September. “All that Apple money had to go somewhere,” Colin Gillis of BGC Financial said.
Standard & Poor’s Capital IQ analyst Scott Kessler concurred, reasoning many investors who have ditched Apple are gravitating to one of its top rivals.
Google makes and distributes its free Android software to Samsung Electronics Co., HTC Corp., and other mobile device makers looking to compete with Apple’s iPhone and iPad. Since its 2008 debut, Android has become the most popular mobile operating system, partly because the free software makes it easier for device makers to undercut Apple prices for iPhones and iPads.
Android is set up to feature Google’s search engine and other services, giving the company a chance to sell more ads.
Apple is still the most valuable U.S. company, with a $432 billion market value. Google now ranks third with a $266 billion market value. Exxon Mobil Corp. hold the spot in between at $402 billion.
Analysts who follow Google see room for gains. The stock’s average price target among analysts surveyed by FactSet stands at $834.40.
Five of the 37 polled think Google stock will surpass $900 in the next year.