Google has been on a run since early September and it has moved swiftly from 520/share to 590 today. Intraday action looked like it would push the stock to the 600 level, but began falling after breaking 596. The price of the shares I purchased back in late August was $500 so they are up about 20% since then. The question is whether or not this quick run up in the share price is sustainable or primed for a pullback just as Krispy Kreme has done the last few days.

Google’s stock price has been anything but normal and many have tried to forecast its price action and it quite honestly has performed better than these analysts predict. But how big is too big for Google? Currently its market cap is nearly $200 Billion. The spendthrift attitude at Google has also been diluting its margins as time goes by and they introduce more ancillary services, usually at no charge. The ballooning of Google’s staff and spending on new products and services is hurting the high profit margin paid search business that has put Google on top.

Earnings are coming up for Google and I think it’s possible that an earnings announcement could cause a drop in share price in the short term as it did the last time despite double digit growth. It will also be interesting to learn of how well the YouTube integration is coming along and the plans for monetization of the service and the pending litigation against the free video sharing portal.

[tags]google, youtube, search, earnings, shaun carter, krispy kreme, litigation, videos, 600, goog[/tags]