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Shares of Google Inc. hit a new 52-week high of $1,121.00 on Dec 31, eventually closing at $1,120.71. The closing share price represents a strong one-year return of 55.0%. The average trading volume for the last three months aggregated approximately 1801K shares.

Google delivered positive earnings surprises for the last three quarters with an average beat of 1.89%. This Zacks Rank #2 (Buy) company has a market cap of $374.41 billion with long-term earnings growth expectations of 16.7%.

Growth Drivers

Google beat the Zacks Consensus Estimate on both lines in the third quarter of fiscal 2013. Earnings surpassed the Zacks Consensus Estimate by $3.09. The increase in earnings was primarily due to higher gross margins and solid expense management.

Revenues increased 5.6% year over year to $14.89 billion. The strong growth in revenues was primarily driven by improvement in Google-owned sites. The number of paid clicks grew 26.0% year over year, indicating increasing contribution from the mobile and emerging markets.

Key Growth Catalysts

We believe that strong paid click growth, solid product pipeline, partnership with the likes of Facebook (FB), enhanced product portfolio with strong focus on a number of things including social, Android, ads, YouTube, Chrome and research will drive growth, going forward.

Moreover, Google continues to gain market share. The company is making continuous investments to expand data centers to meet the need for more data-intensive services, such as Google search, Gmail, Google+ and YouTube. We believe that the company has significant growth potential in the cloud computing segment over the long term.

Estimate Revisions

The Zacks Consensus Estimate for the fourth quarter increased 5 cents to $10.37 over the last 30 days. Also, for fiscal 2013 and 2014, the earnings estimate increased 8 cents and 9 cents to $36.36 and $43.56, respectively, over the same timeframe.

Other Stocks to Consider

Other better-ranked stocks that are performing well at the current levels include Aol Inc. (AOL - Snapshot Report), Blucora Inc. (BCOR - Snapshot Report) and Liveperson Inc. (LPSN - Snapshot Report). All these stocks carry a Zacks Rank #1 (Strong Buy).

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