Google share price hits new high as Apple tumbles

Google is on a roll, making it the $800 gorilla in the room. Its shares hit an all-time closing high of $821.50 yesterday and securities analysts are already forecasting the search company could soon be a $1,000 stock.

It’s a stark contrast to Apple, which has seen its share price tumble from $700 last autumn to $420 today.

Google’s surge to new highs has come as its Android software dominates the mobile phone market and it continues to lead in mobile advertising. The gains have put Google firmly in third place among US companies in terms of market value after Apple and Exxon Mobil.

Google has been on a steep rise since late last year, hitting new highs multiple times, and is up 16.1% since the start of the year.

“It seems to be the big momentum stock right now,” said Eric Kuby, chief investment officer at North Star Investment Management in Chicago, whose firm does not own Google. “There’s a lot of money that likes the tech sector and I think Google has kind of taken over from Apple.”

At least two brokerages – Sanford Bernstein and Credit Agricole Securities – believe the stock could hit $1000 a share before long and several others have a price target of more than $900.

Still, at least one insider, has decided it is time to bail out of a big slab of his stock. Google executive chairman Eric Schmidt recently filed to sell roughly 42% of his stake in the internet search company, citing “individual asset diversification and liquidity,” according to US Securities and Exchange Commission filings.

Schmidt owns roughly 7.6 million shares of Class A and Class B common stock. Google said in a filing in early February that Schmidt planned to sell the 3.2 million shares of Class A stock in a stock trading plan over a period of a year. At current value, that would be worth about $2.6 billion.

Moving mobile

Wall Street has grown more sanguine about Google’s transition towards a more mobile-focused strategy.

It has attempted to extend its lead in internet search advertising onto a mobile platform, a shift forced by the increasing prevalence of smartphones and tablets, but that eats into margins. Over the past year, however, Google has managed to slow the average pace of ad-rate declines, while its Android platform continues to expand its lead over rivals such as Apple’s iOS.

“Mobile search is doing well and mobile is the future,” said Kerry Rice, an analyst at Needham & Co. “Few companies are as well positioned for the coming mobile-centric world we live in better than Google.”

Meanwhile, the US Federal Trade Commission ended an investigation into the company in January without any significant action.

Google shares received wide attention after their August 2004 initial public offering. At an $85 offer price, it was the most talked-about IPO at that time. The stock opened at $100 on its first day of trading, hitting $200 in January 2005 and then $300 in June of that year. The stock is up 721% since its first started trading at $100.