Shares of Google had been stuck in a narrow trading range, but the company's first earnings beat in six quarters finally gave investors a reason to buy the stock, analyst told CNBC.
Google set a new record for a single-day market capitalization gain Friday, as investors plowed $52 billion at the open. Its Class C stock was up more than 14 percent at $663.04 in midday trading.
The surge came a day after the Internet and technology giant posted adjusted second-quarter earnings of $6.99 per share on $17.73 billion in revenue. Sales were up from $15.96 billion.
Analysts expected Google to post earnings of $6.70 per Class A share and $6.74 per Class C share on $17.75 billion in revenue, according to a consensus estimate from Thomson Reuters.
Axiom Capital Management's Victor Anthony said revenue growth, driven by Google's mobile and YouTube businesses, looks sustainable.
"Revenue growth is accelerating. Expenses are coming down," Anthony told CNBC's "Squawk Box." "That's a recipe for earnings beats over the next several quarters."
Also key for the stock is the search engine segment's increase in cost per clicks, or how much advertisers pay each time a user clicks an ad, he said.
Anthony raised Axiom's price target on Google shares to $850 for the end of 2016, representing an annualized return of 18 percent from the stock's close on Thursday.
However, Google is not out of the woods yet, he said. A European antitrust investigation into how Google presents shopping search results creates risk, as does increased competition from Facebook, which is stepping up its direct response and video advertising.
The digital advertising space is big enough to accommodate both Google and Facebook as customers allocate more ad spend to mobile, Anthony said.
Investors should own both stocks, he said, but Facebook is the better buy at the moment because it has significant catalysts ahead that aren't built into consensus estimates. Those include the addition of advertising to its Instagram photo-sharing app and efforts to drum up revenue from its WhatsApp messaging service, which Anthony sees ramping up next year.