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(AAPL) - Get Report

stock has done exceptionally well this year, gaining 22%. One analyst argues that world's most popular Internet search engine has much more room to run.

Cantor Fitzgerald

analyst Youssef Squali raised his price target on Google to $1,030 while retaining his "buy" rating as the company's Enhanced Campaigns (EC) experiences increasing adoption. Squali also noted that Google is seeing strong growth in display and "remains at the forefront of innovation while making great strides in mobile and display."

Squali raised his full-year revenue and earnings per share for 2013. He now expects Google to generate $46.4 billion in revenue, earnings $45.70 per share, up from $45.7 billion in sales, earning $45.18 per share. "Given Google's growing portfolio of assets (search, display and Motorola), we also look at the stock on a SOP basis, which yields ~$1,020/share."

Squali noted that EC is the biggest change Google has made to AdWords in the past decade, and it's going to significantly effect the company's bottom line. Enhanced Campaigns now allows advertisers to target consumers with ads based on time of day, location and what device they're using, making the ads that much more targeted.

As a result, Squali expects paid clicks to go higher. "With EC streamlining PC, tablet and smartphone bid management, and with conversion rates seemingly improving, we believe overall bid demand will increase across all buckets," Squali wrote in his report. "As such, we're raising our paid click growth estimate to 19% in FY:13 and 16% in FY:14, up from +17% and +13%, respectively."

Aside from Google making a huge change to AdWords, YouTube has been nothing short of a monster for the company. Google has said in the past that more than 4 billion hours of video are watched on YouTube each month. On the company's most recent earnings call, Google's Nikesh Arora said "

More than a billion people are finding the channels they love on YouTube every month. Users are now watching over 50 million more hours a day compared to a year ago of 50% increase."

According to comScore, YouTube displayed 2.3 billion ad videos in the U.S. on PC last month, which is up 77.7% year-over-year. There are now ads on 15.5% of all YouTube videos, up from 7.2% a year ago. YouTube continues to have massive reach and its importance as an advertising platform is only growing, Squali noted.

Google shares were under pressure in Monday trading, off 0.9% to $863.43.


Written by Chris Ciaccia in New York

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