Colin Gillis, a technology analyst at BGC Partners , said Google’s market value will exceed $1 trillion in 2020. As of Friday’s close, Google sported a market cap of about $375 billion, meaning its share price (recently at $554.20) would have to jump to nearly $1,500 for the market cap to surpass $1 trillion.
“Google is positioned to be the first company on a U.S. listed stock exchange to have a market capitalization exceed one trillion dollars, an event that could happen by the next decade,” Mr. Gillis wrote to clients last week.
He has a buy rating and $650 price target on Google. “The company is taking the cash flows from its performance marketing business (the best in the world in our view) and chasing after large markets such as content, operating systems, enterprise computing, robotics and automation.”
To pull off the feat, Google first has to eclipse Apple. That’s no easy task, as Apple’s profit, revenue and market cap tower over Google’s. Google also trades at a more expensive price-to-earnings ratio than Apple at the moment.
In its fiscal 2013 which ended last September, Apple reported full-year profit of $37 billion and sales of $170.9 billion. In 2013, Google reported net income of $12.9 billion on revenue of $55.5 billion. Apple’s market cap, at about $600 billion, is more than $200 billion higher than Google’s.
Google’s Class A shares recently fell 0.2% at $554.07. (Wall Street Journal)