Investors were cheered by the tech giant’s latest earnings report, which showed that Internet users are increasingly clicking on the ads Google sells. The company’s revenue rose 18 percent in the most recent quarter, compared with the corresponding period last year, according to a report released Thursday.
Google’s earnings looked particularly strong after Yahoo, normally a primary competitor for online ad revenue, reported a lukewarm quarter in which it lost advertising market share to Google and Facebook.
That helped boost Google’s stock nearly 14 percent Friday to close at $1,011.41. (That makes rival Apple’s stock — a mere $508.89 a share — look downright cheap.)
Pacific Crest Securities analyst Evan Wilson expects Google’s stock to reach $1,135 a share.
The Friday rally sent Google’s market capitalization to $337.39 billion, making it the third-largest publicly traded company in the world behind ExxonMobile and Apple.
Google still faces many hurdles. Its average ad rate — how much it charges every time someone clicks on an ad — fell 8 percent during the quarter. Google also continues to lose money on its purchase of Motorola, which it has used to enter the smartphone market with the Moto X.
“It appears Google has not turned Motorola around, which is an ongoing disappointment,” Wilson said.
Google is also struggling to reach customers through mobile devices and build its audience overseas.
“These categories have lower pricing today, but are the growth opportunity,” Wilson said in a note to investors.
Google has taken several steps to address its mobile-advertising problem. In February, the company simplified the way it sells ads on mobile devices by giving advertisers a way to buy campaigns for computers and smartphones at the same time.