Google Will Beat Apple to $1,000

08/20/2012 8:00 am EST

Focus: STOCKS

In all the love that gets heaped upon Apple, it's easy to lose perspective on other tech juggernauts and their ability to soar, notes Jason Cimpl of The Daily Profit.

After more than a year of waiting, Google (GOOG) appears ready to break out past $630 resistance.

As I first mentioned in April, $630 (blue line) has proved to be a thorn in Google's side since December 2009. That's right, for nearly three years GOOG shares were subdued by $630 resistance.

Though the bears persistently dragged GOOG lower each time the stock neared $630, buyers rarely let the stock slip below $500. And in recent months, the bulls built support for Google near $565 (blue arrows).

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I own GOOG shares in my retirement account because the company dominates the online advertising industry, generating incredible amounts of money from paid search. They have also shown a willingness to expand into other industries, such as hardware, video, and even space travel.

This is a great company, and the rally that's been in the making for years may have started. Google has already passed the first challenge by moving above $630. If the rally has truly begun, the shares should bounce to $700 as early as this month. In addition to the rally up to $700, buyers should provide support near $630 (the once-formidable resistance level).

A move higher makes sense on a valuation basis, too. Analysts following Google stock expect it to earn $49.36 per share in 2013. If the EPS estimate is accurate, the shares will carry a 14 P/E ratio upon reaching $700. A 14 P/E ratio is cheap for a company that consistently increases earnings by more than 16%.

Forget about Apple (AAPL) reaching $1,000. Google stock looks ready to hit the $1,000 mark first.

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