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Google Breaks $900 on 'Must Own' Call (Update 1)

Updated from 9:05 a.m. ET to include more analysis in the fifth paragraph.

NEW YORK (TheStreet) -- Google (GOOG) shares have been on a tear this year, gaining 26.3% year-to-date, trouncing the major indices. Ahead of earnings, one analyst thinks it has significantly more room to run.

Cantor Fitzgerald analyst Youssef Squali, who rates shares "buy" with a $1,030 price target, believes that Google has firmly entrenched itself into all facets of the Internet, and sees multiple areas of growth ahead for the Mountain View, Calif.-based company. "One reason why we consider Google a 'must-own' name in our space is the company's sheer scale across virtually every facet of the Internet ecosystem," Squali wrote in the note. "Google has maintained its commanding position in paid search, extended its lead on mobile platforms, built out and fostered the dominant online video platform, has claim to the most-used web browser, and even built the largest integrated ad exchange/tech stack in the business."

Google has certainly become a household name, with its commanding lead in search (owning 66.7% of the market), as well as properties such as Android, YouTube, Chrome and other properties. Perhaps it doesn't have the brand cachet from a consumer standpoint that Apple (AAPL) or Samsung do, but Google has built up enough brand loyalty that its software and services have become "must-haves" for consumers and enterprise alike.

Owning two-thirds of the search market has allowed Google to venture off into different areas of the Internet, as it makes the vast majority of its money from search and advertising. Businesses such as Chrome, Android and Maps particularly, are free to users, but allow Google to collect information about its users, and maintain its share of the search market, leaving Microsoft's (MSFT) Bing and Yahoo! (YHOO) far behind. Bing owns 17.4% of the market, with Yahoo! owning 11.9%, according to Squali.

Optimism surrounding Google right now is extremely high. Of the 34 analysts surveyed by Thomson Reuters, the mean price target is $950, with one analyst having an $1,100 price target. There are several on the Street who have price targets above $1,000 per share.

This is particularly important, as search continues to see an increase in inquiries. Research firm comScore notes that search has seen an increase of 14.1% year-over-year to 13.4 billion inquiries in the month of May.

That should help boost earnings, as Squali estimates that Google owns 80% of the global ad budget. That figured is boosted by DoubleClick, which Google acquired in 2007 for $3.1 billion. DoubeClick accounts for nearly half of the real-time bidding (approximately $3.3 billion) on advertising spending, according to Squali.

Analysts polled by Thomson Reuters are looking for Google to earn $10.79 per share on $14.45 billion in revenue. Google reports earnings after the close of trading on July 15.

Shares of Google climbed past $900 in early Monday trading, gaining 1.1% to $903.30.

--Written by Chris Ciaccia in New York

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