Google is under pressure to announce good results at the close of trading today, after a 21 per cent rise in its stock over the past month, Bloomberg reports.According to the news agency, Google shares currently stand at 49 times this year's estimated earnings.
After floating three years ago at $85 each, shares in the search engine broke through the $600 mark earlier in October following favourable predictions concerning its future business. They now stand at around $633.48.
In order to keep its stock rising, Google's third-quarter results must live up to the increasingly high expectations of market analysts, according to David Katz, chief investment officer of New York money management firm Matrix Asset Advisors.
He stated: "There's very little room for disappointment," adding that the stock is "very richly valued" and that his firm "would not own it".
Edgar Peters, chief investment officer at investment services provider PanAgora Asset Management, added: "Everything is based on promises.
"While Google seems to be doing very well and has been branching out, whether or not they can really generate earnings that will justify those kinds of multiples is something we have to see."
Earlier this month, Bloomberg reported that Google's stock market success can be attributed to investors betting that it will benefit from increased sales from firms shifting their advertising to the internet.
