With the recent announcement of Google Inc (NASDAQ:GOOG)’s Nest Labs purchase for $3.2 billion, analysts are eager to get their hands on more shares. Analysts believe that the acquisition will strengthen the already powerful company, helping Google grow in the automation and hardware spheres. With the help of Nest, analysts believe that Google Inc (NASDAQ:GOOG) will be well on its way to reaching its goal of connecting the world’s information, and they like the sound of that, recommending BUY GOOG.
Analyst Gene Munster reiterates his BUY rating and a $1,263 price target for Google, regardless of how strange the Nest purchase might seem. Gene believes that Nest provides multiple benefits to GOOG, “First, Nest fits into Google Inc (NASDAQ:GOOG)’s theme of automation with the continued development of robots and self-driving cars. Second, the acquisition could ultimately give Google a better window into home power consumption and ultimately the smart grid of the future. Third, Nest gives Google a world class design team that could influence future hardware products.” Gene adds that, “In total, while we believe the purchase price may seem expensive, we believe that Nest will prove to be worth the cost and fit well within Google’s vision connecting the world’s information.” Gene is ranked 87 out of 2337 analysts and has a 2.3% average return over S&P-500.
Analyst Victor Anthony of Topeka Capital agrees with Gene, advising BUY GOOG. Gene writes, “With this acquisition, Google Inc (NASDAQ:GOOG) is placing a bet that it can connect the more than 115mm homes in the U.S. and eventually millions more globally.” And Victor also sees the larger picture saying, ““We see a longer-term opportunity for Nest Labs combined with Android and Google’s Voice technologies and the embedded systems market.” Victor is ranked 25 out of 2337 analysts and has a 6.3% average return over S&P-500.
Many analysts are on the same page about Google’s not-so-secret weapon, Nest, and they are already projecting Google Inc (NASDAQ:GOOG)’s success, recommending BUY GOOG. To continue following analyst recommendations about GOOG, and other companies, be sure to download TipRanks and staring making financial decisions with advice you can trust.