Wall Street continues to shine on tech companies with bright growth prospects led by smart, original founders. Consider Google. The search and software giant hit a record stock price on Tuesday, crossing $800 per share for the first time ever. At its current share price, Google's estimated market cap is $264.5 billion — about $30 billion greater than Microsoft's, or a little less than 62 percent of Apple's. Any whispered worries about Larry Page's health — the CEO sounded hoarse on the company's recent earnings call and has generally avoided public appearances in the last nine months — haven't seemed to translate to a single worry about Google's future.
Wall Street likes tech companies with smart founders driving future growth
As the Associated Press notes, the $800 boundary is largely symbolic. Still, it's not entirely clear why Google's share price has been rising. The stock has had a nice bounce today, but has been steadily climbing for the last few weeks. The share price is up almost $100 per share since Google's last quarterly earnings report, which was solid but not especially noteworthy in terms of dollars and cents. Bloomberg notes that Google's success in mobile search and advertising, especially relative to competitors like Facebook and Groupon, gives Google a solid lock on both present and future revenue.
Retail and smartphones would put Google in control of its fate
Besides hard data, there are two big, well-founded rumors that may be pushing up Google's stock. The first was teased on the last earnings call, where Google CEO Larry Page spoke about next-generation materials and interfaces for forthcoming smartphones after Google-owned Motorola clears out its current product pipeline. The second is a report that Google plans to open its own retail stores sometime this year, similar to Apple's and Microsoft's, featuring its line of Nexus and Chromebook products. This rumor got a big boost just today, when The Wall Street Journal confirmed Google's plans to open stores.
The details for time, place, and products the stores will carry are still extremely murky, but if Google can remotely match Apple's success in retail, it will be in great shape. As Apple's shown, retail stores for consumer electronics can be both lucrative in their own right and help drive awareness and adoption of a company's entire ecosystem.
Google's growth prospects are clearer and more varied than Apple's
The worry about Apple is that by dominating consumer technology for the better part of the last decade, it's run out of worlds to conquer. There aren't many more big markets for Apple to break open like it did smartphones and tablets. At the very least, those paths aren't clear. Google's growth is both clearer and more varied, covering everything from sure things like mobile search advertising and new smartphones to longer bets like wearable computing and driverless cars. It's no wonder Microsoft would like to stop Google before it can build even more momentum.
Right now, Google's dependent on other retailers and wireless carriers for shaping the experience of how its customers meet its products offline. It's moving somewhere closer to Apple's top-to-bottom integration of hardware, software, and customer experience. The more Android and Chrome devices the company can sell, the more software customers it has, which in turn leads to more desktop and mobile advertising revenue — a virtuous circle that can drive the company's product line and balance sheets forward through the next decade.