Google Can Go to $1,000

Over the past six months, shares of our Best Ideas Newsletter portfolio holding Google (GOOG) have performed exceptionally well, increasing by more than 40% to just over $900 per share compared with a 22% gain for the Nasdaq over the same period. Given the tremendous fundamentals of Google's core search business, continued mobile monetization and a stable of potentially blockbuster products, we continue to believe in the shares and see an upside north of $1,000.

The main driver of our fair value estimate remains Google's advertising business. The core search business saw paid clicks rise 20% year-over-year during the most recent quarter, driving Google's site revenue 18% higher to $8.6 billion. Demand for online advertising shows no sign of slowing, but more importantly, Google has successfully navigated the shift to mobile thanks to both large Android adoption and strong brand recognition on other operating systems (such as iOS). At least in the U.S., we see little competition on either the desktop or mobile space, though perhaps further integration of Siri on the next iteration of Apple's (AAPL) iPhone could take some market share. Nevertheless, Google's competitive position looks as strong as ever, especially as its Chrome browser recently eclipsed 750 million users....463 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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