Internets Continue Hot Streak
Page 1 of 2
Internet issues surged higher from already rosy midday levels amid a number of analyst upgrades and a postive earnings outlook for Amazon.com.
Amazon promised in an earnings report Wednesday that its losses would begin to shrink.
internet.com's Internet Stock Index jumped 46.34, or 5.44 percent, to 898.85, the Nasdaq Composite rocketed 137.08 to 4211.04 and the Dow Jones industrial average added 10.24 to 11013.44.
Amazon.com Inc. (AMZN) surged 14-3/4 to 84-3/16. The e-tail giant late Wednesday reported a wider-than-expected quarterly loss Wednesday, but issued a rosy outlook for the future. Amazon, whose book division has gained profitability, said its expansion was paying off and that would translate into an improved financial picture.
That news prompted a number of analysts to upgrade the stock. Merrill Lynch's Henry Blodget raised his near-term rating to "buy" from "accumulate" and set a 12- to 18-month target of $100.
"We continue to believe that Amazon will be the long-term winner in the e-commerce game. Thanks to increased disclosure from management, highly-profitable new partnership deals, and a positive outlook for 2000, we now have greater confidence in the long-term profit potential" wrote Blodget in a note to clients.
Blodget also raised his fiscal 2000 revenue estimate to $2.75 billion from $2.6 billion and his 2001 revenue estimates to $4.6 billion from $4.4 billion. Despite the rosy revenue predictions, he changed his fiscal 2000 earnings estimate to a loss of $1.15 a share from $1. He predicts better news in fiscal 2001, expecting losses of only 25 cents a share.
Elsewhere, Banc of America's Tom Courtney raised his rating to "strong buy" from "buy" and boosted his price target to $130.
"This is the one stock that investors should own in this group," he said.
Credit Suisse First Boston's Lise Buyer reiterated her "strong buy" while Bear Stearns' Scott Ehrens increased his loss estimates to $1.33 from $1.30. Paine Webber's Sara Farley set a $74 target and reiterated her "neutral" rating. She upped her fiscal 2000 loss estimates to $1.30 a share from $1.09 and upped her fiscal 2001 loss outlook by a penny to 25 cents.
Also, J.P. Morgan's Tom Wyman reiterated his "buy" rating and CIBC World Markets raised its rating to "buy" from "hold."
In other big news, Andover.Net Inc. (ANDN) jumped 9-1/8 to 45-1/8. The Linux network destination was purchased by VA Linux Systems Inc., a maker of Linux-optimized computers, for $913.3 million in stock and cash. In wake of that news, shares of internet.com (INTM), the publisher of this site, rose 6 to 57-1/8. VA Linux (LNUX) was off 8-7/8 to 128.