The Google Theory of Relativity

The discussion behind the scenes at the "Today" show was not Stan O'Neal's golfing handicap, although that now much-reviled and defrocked CEO certainly was worth a few jokes.

Nope, the discussion was all about Google (GOOG - commentary - Cramer's Take), specifically how expensive it must be at $700 a share.

I didn't know what to say, perhaps other than "Nope, it is getting cheaper." I feel that way because now I see some of the new initiatives like the phone system being rolled out ahead. Now I see share continually being taken. Now I see some real ads on Youtube.

Now I see that next year's earnings could be $22 a share, not $20.

Thirty-six percent growth rate? Don't I have to pay 40 times that? Don't I have to if I am paying much more for Chinese stocks, for solar stocks and for medical stocks that don't have the clear path that GOOG has?

Intuitive Surgical (ISRG - commentary - Cramer's Take) gets twice its growth rate for a multiple. Baidu (BIDU - commentary - Cramer's Take) gets three times. Why can't I give the best at least a little more than its growth rate?

But when you talk like this, people just keep referring to where it has been and the "figure" of $700. I swear these guys are doing themselves a huge disservice not to split this stock, even though I never recommend splits.

This is a dynamic situation with estimates constantly too low. It is not expensive vs. Procter & Gamble (PG - commentary - Cramer's Take) and Coca-Cola (KO - commentary - Cramer's Take) and Pepsi (PEP - commentary - Cramer's Take), let alone BIDU and ISRG. That's the issue, plain and simple.

It isn't amazing at all. It is what happens when you have a great company with a stock that simply can't keep pace with the estimate bumps!

At the time of publication, Cramer had no positions in stocks mentioned in this post.

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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. Click here to order Cramer's latest book, "Mad Money: Watch TV, Get Rich," click here to order his book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here.

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