Google Inc (GOOG) Shares Surge as Analysts Impressed by Strong Revenue

The shares Google Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) surged after the delivering impressive revenue that prompted Wall Street analyst to issue positive recommendations.

The company’s second-quarter revenue increased 22% to $15.97 billion. Excluding traffic acquisition cost (TAC), it revenue was $12.67 billion, higher than the $12.32 billion estimated by analysts.

The search engine giants Class A shares (GOOGL) climbed 4.18% to $605.11 per share while its Class C shares (GOOG) went up 3.72% to $5.95.08 per share today.

Google remains a ‘core holding’ in technology

In an interview with CNBC, Nomura analyst Anthony DiClemente said Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) remains a core holding in technology citing the reason that the search engine giant trades at a “very reasonable earnings multiple” and its “topline growth continues to be very impressive” considering its size.

In a noted to investors, DiClemete said the company’s cost-per-click did not decline much compared with their expectation and its pricing growth was higher. He also noted that Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) hired more than 2,000 employees during the quarter, and the rate of its capital expenditure is slowing down, which will ease concerns regarding its high spending on “moonshot projects.”

In addition, DiClemete also offered positive comments about YouTube with the launching of Google Preferred Video in April. According to him, it will attract marketers on YouTube with guaranteed ratings, better measurement, targeting ability and favorable cost per impression pricing.

DiClemente maintained his Buy rating for the shares of Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) with a $675 per share price target.

Mobile could serve as potential tailwind

On the other hand, JP Morgan analyst Doug Anmuth was impressed by the performance of Google Sites. The segment generated $10.94 billion in revenue, which represents 69% of the total revenue of Google Inc (NASDAQ:GOOG).

Anmuth noted that the cost-per-click growth of Google Sites bottomed during the fourth quarter last year. During the first six months of this year, the decline was lesser. According to the analysts, although the financial results of Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) demonstrates “many cross-currents,” the inflection in cost-per-click growth for the Sites segment, which started in the first quarter, possibly suggest more “material improvements” in mobile monetization going forward.

He believed that mobile will serve as a tailwind for the search engine giant. Anmuth maintained his Overweight rating for the shares of Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) and raised his price target from $645 to $675 per share.