Will Google’s figures justify the hype?

The online search giant is preparing to post its latest figures, as its share just drifts off all-time highs.

A look at the Google share price performance over the last couple of years will leave traders in little doubt about how highly the company is regarded. In 2013 the shares rose from $72 at the beginning of the year to close at $112 – a 55.5% increase.

Like all online companies, Google is seeing a shift in its user base from the more historic PC-centred user to those preferring a mobile device platform. This shifting demographic has enabled users to access the search engine more extensively throughout the day. However, the constraints of their devices are changing the type and volume of advertising to which they can be exposed. To address this issue, Google has spent $17 billion in the last two years – more than Facebook, Amazon, Microsoft, Apple and Yahoo combined. It has continued to diversify away from its original core business, and has a war chest of more than $50 billion which it could still use.

This week’s fourth-quarter figures are expected to reveal earnings per share of $12.30 and quarterly revenue of $16.7 billion.

While the share remains above the supportive 50-day moving average, a retest of previous highs around the $117 level could well be seen. However, a close below the 50-day moving average might prompt the shares to slide back down to $104.50. Traders should be conscious that at present the share price is already 16% above the 200-day moving average.  

Google Inc chart

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