In the middle of Silicon Valley's most important week of the current earnings season, Google (GOOG) and Apple (AAPL) gained on Wall Street as Tuesday's encouraging tech earnings gave investors hope that Wednesday's highly anticipated reports would also exceed expectations.
Google was one of a handful of tech companies to top analysts' projections for earnings in the holiday quarter Tuesday, as CEO Larry Page heralded the company's work in mobile advertising and said the Mountain View search giant is getting closer to turning around Motorola Mobility, which it aquired for $12.5 billion.
"We're serving our users with amazing products that are getting even better," Page said in Tuesday's conference call. "Our mobile business is going very well."
Analysts rushed to increase their price targets for Google after the strong report, with Reuters reporting that at least 12 increased their projections for the best price at which to sell Google stock. The largest of those increases came from Cantor Fitzgerald, which added $80 to its price target, pushing it to
Advertisement
$900.
"Fourth-quarter results highlight very healthy performances in both search and display, confirming Google's position as one of the best global plays on secular growth in online advertising and e-commerce," Cantor Fitzgerald analysts wrote in a note Wednesday morning. "Motorola remains a show-me story, but one that seems on track for a turnaround, with only modest expectations."
Google gained $38.63, or 5.5 percent, to close at $741.50 Wednesday.
Other valley tech companies
More Apple coverage
that released results Tuesday also gained in Wednesday trading: struggling Sunnyvale chipmaker Advanced Micro Devices advanced 11.4 percent to $2.73 after confirming that its losses were not as great as analysts expected; Intuitive Surgical, also based in Sunnyvale, gained 9.4 percent after its earnings report revealed strong demand for the medical device company's da Vinci surgical robots; and San Jose's Super Micro Computer increased 18.6 percent after announcing a record quarter for net sales.
Elsewhere in the tech world, IBM increased 4.4 percent after growing profits year-over-year for the 40th consecutive quarter. The lone dark spot was Texas Instruments, which dropped 1.1 percent after warnings that demand in 2013 is
People shop at an Apple store inside a mall in Cheektowaga, N.Y., on Oct. 26, 2012. (David Duprey/AP file)
unclear.
Analysts said the wave of strong reports Tuesday reflected well on the tech industry in general, which had been expected to be a ballast on overall earnings for the holiday quarter. A Thomson Reuters analysis of projections earlier this month showed that analysts expected profits to shrink 1.1 percent year-over-year for tech companies, despite expectations of overall earnings growth.
"Tech companies are really shattering expectations, which is obviously helping markets. There doesn't seem to be an end to this rally," said Todd Schoenberger, managing partner at LandColt Capital, told Reuters.
Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.