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As surely as day followed night, Google received a higher price target on the first trading day of the new year. Google (NASDAQ:GOOG), which already has a handful of price targets at $600 and one at $650 from Cantor Fitzgerald, received on Wednesday a price target of $630, from none other than Safa Rashtchy of Piper Jaffray.

Recall last year - on the first trading day of 2006 -- when Safa made a similar, though far more outrageous, call for Google when he predicted the stock would hit $600.

At the time, Google was trading around $429 per share and I wrote that we might look back one day and say Google was expensive or cheap. I concluded that we'd say that the stock was closer to expensive and was unwilling to embrace the $600 price target, based on the fact that investors wouldn't pay as high a multiple.

Today, with Google trading around $470, I'd say the stock at the time of those bullish calls was indeed closer to expensive than cheap. As for this call, I'm not convinced that Google will hit $600, and I'm worried about putting any money to work now if the stock crumbles like it did last year. After Safa made that call in 2006, Google shares rocketed to $466, only to fall splat down to $337 by mid-March. The stock managed to climb above $500 finally by the end of 2006.

So, what are the reasons for Google's ascent to $630? According to Safa, Google is poised to keep its growth rate intact as its non-search assets gain traction. Based on a Piper Jaffray proprietary survey of Internet users, 28% said they use Google Maps, 23% use Google Earth, 13% use Google Toolbar and 12% use Google Video. I think this certainly makes me more bullish on Google and confident that this company's shares won't ever be a bad investment.

But I am concerned about what investors will be willing to pay for Google a year from today. Recall last year, Safa forecasted that Google would earn $11.91 per share in 2007 and that investors would be willing to pay 50 times those earnings. Well, even though most analysts now expect Google to earn $13.75 a share this year, investors are only willing to pay 34 times this year's earnings. (Read that Net Sense from 2006.)

What will we say next year?

GOOG since IPO:

goog long

Source: Google To Hit $630, Fueled By Non-Search Assets - Jaffray