According to Evercore’s report, Google Inc (NASDAQ:GOOG)’s video efforts span from a combination of original and partnership content via YouTube and Google Play to serving as a multi-channel provider through Google Fiber where more than 200 content partnerships have been formed. Factoring Google’s ability to deliver such content through a variety of hardware / software experiences (e.g., Chromecast) suggests to analysts that video will continue to be a very important focus area for Google. On a stronger industry video forecast, research firm’s target moves to $1,290 from $1,250, implying Google Inc (NASDAQ:GOOG) can trade at 15x 2014 EBITDA.
Baird also lifted Google’s PT (Last Month)
Baird analysts Colin Sebastian and Rohit Kulkarni reiterated their Outperform rating and increased their price target for Google Inc (NASDAQ:GOOG) from $1,000 per share to $1,175 per share. The search giant revealed that its Compute Engine service has been rolled out to “general availability,” thus increasing its move into infrastructure-as-a-service.
Sebastian and Kulkarni believe Google is in a good position to become “the next large player in cloud services” as it competes for an even bigger share of information technology spending. Their price target increase is based on this expansion plus “positive” data points about holiday ecommerce.
The Baird analysts believe Google Inc (NASDAQ:GOOG) has the biggest cloud computing infrastructure with unique scale and leverage to its services. They’re estimating that the company’s cloud platform generates around $1 billion in annual revenues and is growing rapidly. In future years, they estimate that cloud services will generate $10 billion in incremental revenues for Google, which would make them a bigger piece of the pie than YouTube.