Google has gained a formidable upper hand against Apple when it comes to investor optimism.
As shares of Apple remain depressed (trading down again today at $426.18 shortly after noon Wednesday), Google is on fire, trading north of $831 and building momentum with each passing day.
According to data compiled by Bloomberg, Google’s shares are now trading at 25 times profit, compared with a price-to- earnings ratio of less than 10 for Apple.
So what’s giving such a solid boost to Google? Lucrative mobile advertising prospects certainly aren’t hurting.
Investors are willing to pay more for each dollar of Google’s earnings relative to Apple amid optimism that Google, with more than 40 percent of the U.S. online-advertising market, will command even more of the $37.3 billion that businesses spend each year to reach Web audiences. Google also has used an alliance with Samsung Electronics Co. to gain share in mobile software, feeding the competitive threat weighing on Apple as investors await the next big product from the iPhone maker.
“There’s only one company benefiting from all the growth areas of the Internet — be it video, mobile, local, social, display advertising,” Sameet Sinha, an analyst at B Riley & Co, tells Bloomberg. “Apple has just done well in devices, nothing else.”