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Google Vs. Apple: Is Google Getting Too Crowded?

Talking Numbers

Can Google catch up to Apple or is it too crowded?

How high does Google’s stock have to go to make the company worth as much as Apple?

No, we’re not quizzing you. Here’s the answer: about $1,200, give or take a couple of bucks.

Apple is worth almost $408 billion. Google is worth almost $300 billion.

But while Apple is worth a third more than relative upstart Google, the fortunes of the two companies this week have gone in opposite directions. Google’s stock is up 4% while Apple’s stock is down 4%. Look at the two companies over the course of the year amplifies the difference: Google’s year-to-date return is 28% while Apple is down 18%.

Google had a banner week as it unveiled a host of new products and services at its developers’ conference. Streaming music to go after Pandora and Spotify. Streaming video to go after Netflix and Hulu. That and other products had investors anticipating streams of cash into the company’s coffers, the stock reaching its all-time high on Wednesday.

Though Apple’s headquarters are less than ten miles away from Google’s, it might as well be more than a million for some investors. The company’s earnings fell 18% and fund managers have taken notice. David Tepper of Appaloosa Management sold 40% of his Apple shares. Julian Robertson of Tiger Management sold off all of his shares.

And then there’s the future. Apple’s iPhone iOS operating system is 17% of the market but it’s losing more ground to Google’s Android’s already-enormous 75% market share, according to one study released on Wednesday.

Still, Apple is trying to make the company more attractive to investors and is using its $145 billion in cash to do so. A month ago, it announced a share buy-back and raised its dividends.

But will Google catch up to its older, Bay Area rival? Two technical analysts weighed in on the charts.

J.C. O'Hara, Chief Market Technician at FBN Securities, of believes Google is on its way up. Looking at the charts for the last five years, O’Hara sees an ascending triangle. Using the dimensions of the triangle, O’Hara believes the stock can go up to a range between $985 and $1,000 per share.

“Right now, we’re still seeing buyers coming into Google,” says O’Hara. “Where’s the profit really going to be taken? I think it’s going to gravitate towards that $1,000 level.”

Abigail Doolittle, Technical Strategist at The Seaport Group and CNBC contributor, believes Google is overbought.

“The nice, long-term uptrend is really driven by strong revenue growth,” says Doolittle. “The breakout over this ascending triangle is true investor enthusiasm about this company being a king of innovation.”

However, the company’s revenue numbers missed the analysts’ estimates and the acquisition of Motorola so far hasn’t panned out as planned, notes Doolittle.

Doolittle believes the recent run-up in the stock is too high when compared to analysts’ growth estimates. And that will eventually bring shares back down.

“I think we’re looking at an $800 stock at some point in 2013 easily.”

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