Economy View: 05/07 Google Can Reach $800/Share: Analyst

05/07 Google Can Reach $800/Share: Analyst

Published: Tuesday, 5 Jul 2011 | 2:00 PM ET

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By: Margo D. Beller
Special to CNBC.com

Heath Terry has no hangups about Google. The Canaccord Genuity managing director told CNBC Tuesday he believes its stock can easily reach $800 a share based on increasing Android-powered mobile communications revenue and market share.

"While there are a lot of headwinds from regulatory pressures and competition both real and imagined, longer term, once we see the growth, that price target’s going to be pretty easy," he told CNBC Tuesday.

"You think about the sheer numbers, the amount of time people spend [using their smartphones] and the amount of commercial activity you see on them, that number isn’t much of a stretch."

Google's [GOOG 532.44

11.412 (+2.19%)

] revenue growth has been accelerating and he expects margin expansion in the next two to three years. "We’re still very early stage in mobile revenue for the industry as a whole," he said. "We’re seeing 50 percent year over year growth in smartphones, and Google’s taking a lot of share in that space."

But will Google be able to make money on the amount of time people spend online? Terry expects mobile phone-based web advertising revenue to increase to 30 percent over the next four to five years, with the rest of the company's revenue coming from continued growth in search and display advertising.

Terry's other stock picks are Microsoft [MSFT 26.03

0.01 (+0.04%)

],Amazon.com [AMZN 213.19

3.70 (+1.77%)

] and Apple [AAPL 349.43

6.17 (+1.8%)

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Disclosures:

Heath Terry does not own shares in GOOG, MSFT, AMZN or AAPL.

Disclaimer