Google investors are flying high again

SAN FRANCISCO — The anxieties that rattled Google Inc.’s stock a few weeks ago have evaporated, giving way to another burst of euphoria after the online search engine leader delighted investors with first-quarter earnings that erased recent doubts about its growth.

Wall Street celebrated by driving up Google’s shares by as much $35.72 Friday, prompting some analysts to predict it won’t be long before the company’s stock price surpasses $500 for the first time.

But just because Google shares are flying high again doesn’t mean there won’t be more turbulence ahead, reviving some of the concerns that caused the stock price to plummet from its peak of $475.11 in January to $331.55 in March — a 30 percent swing affecting nearly $45 billion in shareholder wealth .

“There will always be things to be excited about and things to be worried about with a stock like this,” said American Technology Research analyst Rob Sanderson. “They are going to keep us on our toes.”

Mountain View, Calif.-based Google injected even more optimism into analysts’ already bright outlooks by reporting a 60 percent increase in its first-quarter profit. The earnings, released late Thursday, topped the average analyst estimate by an extraordinary 32 cents per share. Revenue surged 79 percent to $2.25 billion, an astounding growth rate for a company as large as Google.

The shares gained $22.10, or 5.3 percent, to close at $437.10. Google’s stock has more than quintupled from its August 2004 initial public offering price of $85.

Citigroup analyst Mark Mahaney was so impressed with Google’s first quarter that he increased his price target on the stock by $60 to $550.

Piper Jaffray analyst Safa Rashtchy raised his earnings estimate and said he was probably still being too conservative as he reiterated his belief that Google is headed toward $600 — a price that would give the 7 1/2 -year-old company a market value of $185 billion.

The high hopes are founded on the belief that Google’s search engine will remain the Web’s most popular advertising vehicle while the company continues to expand its services to mobile devices and tries to license more software to corporate America.

Google also wants to control more advertising in the print and broadcast media, an ambition that could generate even bigger profits.