Google shares zoom 16.3%, add $65 bn market value in a day

Google Inc's shares shot up 16.3 per cent at close at $699.62 yesterday, adding about $65 billion to its market value, with strong growth in YouTube viewership easing up investor concerns about Facebook Inc's push into video.

Google's class A shares rose to the largest in a single-day percentage change in over seven years yesterday.

The surge, which came after the search giant posted better-than-expected profit for the first time in six quarters, saw the Nasdaq composite index rise to a record intra-day high.

The rise in the company's market value was more than the total market capitalisation of Caterpillar Inc, the world's biggest construction equipment maker.

Google's shares were up at a record high of $703, valuing it at $471.50 billion and consolidating its position as the world's second-most valuable company after Apple Inc.

At least 27 brokerages increased the targets on the company's stock, with analysts also hailing new chief financial officer Ruth Porat's disciplined spending approach.

Google will be valued at $545 billion at the highest price target of $800. Apple is valued at around $740 billion.

According to analysts, Porat who joined in May from investment bank Morgan Stanley, is likely to drive the stock in the short and medium term with her energy, analysts say.

Meanwhile, the Nasdaq closed at a record high for the second straight session yesterday, vaulting over 0.9 per cent following the Google surge.

The tech-rich Nasdaq Composite Index shot up 46.96 points (0.91 per cent) to 5,210.14.

The Dow Jones Industrial Average fell 33.80 (0.19 per cent) to 18,086.45, as the broad-based S&P 500 added 2.35 (0.11 per cent) at 2,126.64.

Google also gave a bullish outlook on its YouTube business and hinted that a cash return to shareholders was in the offing.

The share price spike added about $4 billion each to the fortunes of co-founders Larry Page and Sergey Brin.

Google's gain also delivered a hefty boost to  the S&P 500, as well, adding more than 6 points to the S&P yesterday, according to S&P Dow Jones Indices senior index analyst Howard Silverblatt.

Google beat analysts' expectations in the earnings it reported after Thursday's close, earning $ 6.99 per share on $ 17.83 in revenue.