Google Falls Below $600
Updated stock priceNEW YORK (TheStreet) -- After a big year-long run, Google's (GOOG) - Get Report stock ascent has taken a bit of a breather.
Google hit a 52-week high earlier this week, but the stock fell 3% Wednesday and was down another 2% Thursday on no particular news.
Are these ominous beginnings of a Google swoon? After the 94% gain for the stock last year, it's a reasonable concern.
Analysts like Merriman Curhan's Richard Fetyko say no, this may be the kind of reset that investors appreciate.
"All indications I'm getting is that search-ad spending was very strong in the fourth quarter," Fetyko wrote in an email.
In a note Thursday, Fetyko raised sales estimates 19% for Google's fourth quarter 2009. Citing strong search traffic growth and ad price increases, Fetyko now predicts that Google will report fourth quarter sales of $4.86 billion, which is up from his prior forecast of $4.77 billion.
Fetyko reiterated his buy rating and lofty $750-to-$800 price target on Google.
The research note comes during a busy week for Google.
Earlier on Thursday, Google agreed to add $26 million in cash to the $106 million worth of stock it is paying for the acquisition of Web video-compression shop
On2
(ONT)
. The deal was expected to close late last year, but On2 shareholders felt they were owed more money given the 35% increase in Google's stock price since the deal was struck in August.
On Tuesday,
Nexus One
, an Android-powered "super phone" that it will sell directly to consumers and telco subscribers at carriers like
Deutsche Telekom's
(DT) - Get Report
T-Mobile
,
Verizon
(VZ) - Get Report
and
Vodafone
(VOD) - Get Report
.
Google's Nexus One phone |
Some investors have worried that Google's first -- and only -- venture into gadgets may have an adverse impact on profits, possibly spoiling its partnerships with phone makers like
Motorola
(MOT)
.
But by Wednesday, those concerns diminished when Google's Android effort got a huge boost. The lone U.S. holdout in the Android front,
AT&T
(T) - Get Report
,
announced it would have five Android phones
selling by July. The phones will come from Motorola,
HTC
and PC giant
Dell
(DELL) - Get Report
.
-- Reported by Scott Moritz in New York
