Each week, I endeavor to report the results of the Big Idea Portfolio, a collection of five tech stocks that I believe will crush the market over a three-year period. I’ve done it before; my last tussle with Mr. Market ended with me beating the index’s average return by 13.35%.
Real money was on the line then as it is now, which means any one of the five stocks you see below could tip the scales in my favor. This time, Google Inc (NASDAQ:GOOG) stock hit a 52-week high and Riverbed Technology, Inc. (NASDAQ:RVBD) reversed a sell-off.
But it was a nearly 7% gain in Google stock that led my portfolio higher. Investors can thank Google Now for iOS, which the company released on April 29. Similar to Siri for how it allows users to speak queries into the search engine, Google Inc (NASDAQ:GOOG) Now, an intelligent personal assistant, has been a must-have for Android smartphone and tablet owners since last summer.
So far, the updated Google app with Now gets just three out of a possible five stars in the iTunes App Store. Why the low rating? Concerns over battery life. A growing number of users say Now drains devices by tapping iPhone and iPad GPS tracking data too frequently.
Google Inc (NASDAQ:GOOG) says those fears are unjustified. Who’s right? Logically, it makes sense that continuous tracking by any app would drain battery life. But I’ve also seen minimal impact on my iPad Mini’s battery after having Now up and running for about a week. I’m still early in the process of testing the upgraded app on my iPhone 4S.
Either way, the rush to implement Now proves Google is making headway on Apple Inc. (NASDAQ:AAPL)‘s home turf. All told, Google Inc (NASDAQ:GOOG) has 27 apps available at the iTunes App Store. Apple Inc. (NASDAQ:AAPL) has only 11 more, many of which are far less popular than Google Search and YouTube, mainstays that rank among CNET’s top choices for iOS apps.
Riverbed hasn’t made as much progress in its niche. First-quarter revenue and profit came in lower than expected as management reduced Q2 guidance to $0.21 to $0.22 a share in adjusted profit on $255 million to $260 million in revenue. Analysts had been calling for $0.25 and $273 million, respectively.
In earlier quarters, a miss of this magnitude would have initiated a sharp sell-off. And that, indeed, is what we had initially: The stock declined to just over $14 a share before rallying. Why the jump? My guess is, with Riverbed trading for less than 13 times next year’s earnings target, there’s little downside left to buying at current prices.