- Google had an impressive 2017 and its momentum could push it even higher in 2018, a UBS analyst notes.
- The company's plays in mobile computing, AI and its cloud services have positioned it well for growth.
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Google had an impressive run in 2017 and that momentum may help it overshadow competition in the new year.
The stock is up 5% year-to-date, and has traded north of $1,000 per share since October.
UBS Analyst Eric Sheridan has named Google a top pick for growth in 2018, given the Silicon Valley giant's sustained operating performance, capital allocation, and its potential big boost from cash repatriation under the new tax law.
Sheridan also believes that Google is nailing four themes that could keep it at its highs:
- Mobile Computing. Google is expected to spend more money in its shift to mobile computing, telling investors that it expects higher traffic acquisition costs, or the amount of money needed to pay PC makers, phone manufacturers and websites to promote its services and direct people to its sites, in the future. However, some analysts believe the spending may be necessary in order to boost revenue.
- Artificial Intelligence/Machine Learning. While many tech giants are increasingly investing in AI to power their offerings, Google is doing a great deal better than its competitors, according to three Chinese researchers.
- Media Consumption. Big tech firms may have shirked away from describing themselves as "media companies," but Google and its competitors have actively played large roles in becoming the go-to news destination for consumers.
- Cloud Computing. Google recently signed a partnership with Cisco to migrate the data and applications of Cisco's users to its Google Cloud platform. The alliance will likely help Google compete against Amazon Web Services and Microsoft's Azure.