Google shares touch $1,000 for the first time ever

The moment Google topped $1,000 per share

Google shares jumped to an all-time high above $1,000 after the search engine giant reported a surge in mobile and video advertising that helped drive quarterly revenue up 23 percent.

At least 16 brokerages raised their price targets on the stock to between $880 and $1,220, with Deutsche Bank bumping up its target price by 26 percent.

The shares rose 13 percent to $1007.40 after the opening bell on the Nasdaq, before easing back a few dollars.

(Watch: Google's Q3 beat the Street)

Google said paid clicks increased by a quarter in the three months ended Sept. 30, from a year earlier, the highest rate of growth in the past year.

This offset an 8 percent fall in average cost-per-click, the price advertisers pay Google when consumers click on their ads.

"We view solid paid clicks growth to be a good indicator of demand, driven by the continued shift to mobile,'' J.P. Morgan analysts said. They had expected 21.5 percent growth.

Google's paid clicks up 26%

In contrast, analysts say Yahoo, which this week reported a tepid quarter, has lost market share in display and search advertising in the face of strong competition from Facebook and Google.

Google shares have climbed 38 percent this year, rewarding investors such as Fidelity Investments' $101 billion Contrafund.

Contrafund added to its stake in Google in the third quarter and got a big lift from the surging performance of Facebook and Tesla Motors as well. The fund, managed by star stock picker Will Danoff, returned 8.94 percent in the third quarter, easily beating the 5.24 percent advance of the S&P 500 Index.

Facebook is expected to report its third-quarter results on Oct. 30.

(Read more: Don't sell Google on earnings pop, trader says)

Google set up well for international recovery: Pro

To counter declines in cost-per-click rates, Google rolled out in February a service to help advertisers market through a mix of smartphones, tablets and desktops.

The J.P. Morgan analysts said this drive was a major opportunity for Google in the upcoming holiday season.

Analysts also highlighted Google's ability to generate revenue from its video-streaming website, YouTube.

YouTube branded video-ads grew more than 75 percent in the quarter, from a year earlier, with 40 percent of traffic now coming from mobile devices.

"We estimate that Google's key YouTube asset generated approximately $4 billion in revenue in 2012, positioning Google extremely well for the strong growth in video advertising,'' RBC Capital Markets analysts wrote in a note.

(Read more: Google shares jump after earnings beat)

Analysts at Jefferies said Google is best positioned to benefit in mobile with one billion Android activations. The company sells applications and content through its Google Play Store.

The Mountain View, Calif.-based company—known for its Google Maps service, Chrome browser and Nexus line of smartphones and tablets—reported a 32 percent jump in revenue from the rest of world (excluding UK) during the quarter with growth coming from Japan, South Korea and Australia.

"Google should be a good play off any European and Emerging Markets recovery,'' analysts at RBC Capital markets said.

"We think the worst is behind Google from a sentiment perspective,'' Deutsche Bank analysts said.

—By Reuters.