Wall Street has high hopes for Google Inc after the bell on Thursday, even as advertising spending remains under pressure and another tech giant, Intel Corp, disappointed some investors.

Shares of Google, the No. 1 U.S. Internet search firm, have surged nearly 30 percent in the past three months, and many option traders expect another big move, most likely higher, after Google releases its first-quarter financial results.

Analysts and options strategists say the whisper number is for first-quarter earnings, excluding items, of at least $5 per share -- which would be above analysts' average forecast of $4.93 a share according to Reuters Estimates. In the year-ago quarter, profit excluding items was $4.84 per share.

The options in Google are going crazy, said William Lefkowitz, options strategist at brokerage firm vFinance Investments in New York.

With ad spending under pressure industrywide, Wall Street is anxious to see whether Google will be able to sidestep the worst effects of the recession.

Analysts, on average, are forecasting first-quarter revenue of $5.53 billion, which would be up 6.6 percent year on year but down 3 percent quarter on quarter -- the first time that Google would post a sequential drop in sales.

Google's stock is up 3 percent at $389.86 at mid-afternoon on Nasdaq.

About 67,000 call options and 55,000 put options have changed hands, double the average combined daily volume for Google, according to option analytics firm Trade Alert.

Intel kicked off the tech earnings season this week with stronger-than-expected quarterly results, but its shares fell after the chip giant refrained from giving a formal revenue forecast.

Google, by practice, does not give guidance.

Judging by the action in the share price, optimism is high heading into the news, said Frederic Ruffy, options strategist at Web information site WhatsTrading.com. Sentiment in the options market is bullish as well.

The April $390 and $400 calls are among the busiest contracts, suggesting that some investors are buying out-of-the-money calls -- options with strike prices higher than the market price -- on expectations of a post-earnings rally in Google shares, he said.

GOOGLE CALLS BUSIEST

Ruffy also noted Google's overall option implied volatility -- the expected magnitude of share price movement conveyed by option prices -- has eased. In afternoon trade, it stood at about 51 percent, down from roughly 54 percent on Wednesday, which also reflects a sense of optimism heading into the news.

Looking at the difference in implied volatility between April and May options -- the so-called volatility skew -- suggests the options are priced for a post-earnings move of $23 per share, or roughly 6 percent when Google reports after the close, Ruffy said.

Lefkowitz also noted a lot of interest in Google's out-of-the-money calls as well as puts. Most notably the $320 put strike price and the $450 call strike price.

Later in the session the April $390 straddle was priced at about $28. That is telling us that the options market is expecting about an 8 percent move in the stock between today and the close tomorrow, said Joe Kinahan, chief derivatives strategist at online brokerage thinkorswim Group in Chicago.

An investor typically buys a straddle -- a call and a put with the same strike price and expiration date -- in anticipation of a big swing in the underlying stock.

This expected move would be triggered by the earnings report after the close, Kinahan said.

(Reporting by Doris Frankel; Additional reporting by Alexei Oreskovic in San Francisco; Editing by Tiffany Wu and Richard Chang)

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