Internet stocks were getting a lift in midday trading Thursday from a slew
of bullish comments on Amazon.com Inc., which promised in an earnings report
Wednesday that its losses would begin to shrink.
At 12:15 p.m. Eastern, internet.com’s Internet Stock Index had jumped 23.93,
or 2.81 percent, to 876.44, the Nasdaq Composite had leaped 50.95 to
4,124.91 and the Dow Jones industrial average had fallen 105.48 to
Amazon.com Inc. (AMZN)
had jumped 11-15/16 to 81-3/8. 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
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 beneficiary in the
e-commerce game,” he said in an advisory.
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.”
Most other leaders were up, including Broadcom Corp. (BRCM), up 10-7/8 to 326-5/16, Broadvision
up 8-3/4 to 145-1/2, CMGI Inc. (CMGI), which gained 2-1/4 to 121-3/4 and eBay Inc.
(EBAY), which rose 5-5/16 to 156-15/16.
Other climbers included Goto.com Inc. (GOTO)
, up 6-11/16 to 77-11/16, Inktomi Corp.
was up 5-1/2 to 109-5/16, Juniper Networks Inc. (JNPR)
had gained 10-1/16 to 147-1/8 and Yahoo!
had jumped 12 to 340.
In other sector news, Andover.Net Inc.
had jumped 9-3/4 to 45-3/4. The Web site operator was purchased by VA Linux
Systems Inc., a maker of Linux-optimized computers, for $913.3 million in
stock and cash. VA Linux (LNUX)
was off 7-7/8 to 129.
Open Market (OMKT)
had gained 1-13/16 to 58-13/16 after reporting a 9-cent fourth-quarter loss,
beating analysts’ forecasts by 3 cents. Sales jumped to $25.3 million from
$16.8 million last quarter.
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