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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Lyle Bean who wrote (70962)	1/11/1999 6:00:00 PM
From: Joey Smith	Respond to of 186894

ALL: A bit more info on today's earnings upgrade. Notice the $220 a share target! joey cbs.marketwatch.com Net group leads tech stocks to records By Stephanie O'Brien, CBS MarketWatch Last Update: 5:38 PM ET Jan 11, 1999 Also: Tech Report, Internet Daily NEW YORK (CBS.MW) -- The Nasdaq Composite Index drove to a seventh-straight record high Monday, propelled by another record-setting performance from Internet stocks. The Nasdaq rose 40.18 points to an all-time record 2384.59 but the Dow Jones Industrial Average fell 23.43 to 9619.89. Net stocks got a boost after Merrill Lynch raised its price target for America Online (AOL). In addition a number of partnerships among high-profile technology companies including one pairing Yahoo! (YHOO) with International Business Machines (IBM) led shares higher. See Movers & Shakers. The Goldman Sachs Internet Index leaped 16 percent. The Amex Internet Index gained 6.3 percent. The Philadelphia Semiconductor Index rose 2.9 percent. The broader Pacific Stock Exchange Technology Index climbed 2.4 percent, while the Morgan Stanley Technology Index rose 2.5 percent. The Goldman Sachs Hardware Index was up 2.6 percent. The Amex Networking Index, meanwhile, fell 0.3 percent, while the CBOE Software Index was down 0.6 percent. Internet stocks Many Internet stocks reached new highs for the seventh straight session. See full story. Shares of Sharper Image Corp. soared 66.7 percent Monday after the specialty retailer said it's expanding its Web site to include a product auction site. The company (SHRP) said the auction site will feature a wide variety of Sharper Image products and should open this February. Shares screamed up 8 1/4 to 20 5/8. See related story. Amazon.com (AMZN) gained 24 3/8 to 184 5/8. Shares of America Online (AOL) rose 18 1/4 to 164 3/4. Lycos (LCOS) jumped 39 1/4 to 131. Yahoo! (YHOO) shares climbed 70 7/8 to 414 1/2. See related story. Ubid (UBID) lost 4 1/2 to 114 1/2. EBay (EBAY) fell 7/8 to 291 1/2. Playing the Nets William Baker, president of William Baker Associates and publisher of Stock Options Farm Optioneer/Model Portfolio Newsletter, prefers to buy options on tech companies. He says this is a good time to play the bigger Internet players like Yahoo! Baker is convinced that Yahoo! will announce a split in conjunction with its earnings release Tuesday. Buying an option on such high-flying stocks pre-split "is always a good bet that they're going to go up because the float's so low that the money managers come in and gobble up all the [post-split] shares" once the split is announced, said Baker Baker points out that one of the key issues with big Internet stocks is that they generally have far fewer shares outstanding than companies with comparable market caps, such as General Electric. That's one of the reasons why the stocks can explode as suddenly as they often do. As a result, you're really playing with fire if you want to short them, he says, especially if they're likely to split soon. "You can go from having 100 shares shorted to 200 shares to maybe 800," he said. "There are easier ways to make money." Among e-commerce stocks, Baker prefers stocks that aren't immediately identifiable as such. He likes Security Dynamics (SDTI), a maker of systems that facilitate secure credit card transactions and other functions on the Web; Musicland (MLG), which Monday announced the summer launch of several e-commerce sites; and book retailer Barnes & Noble (BKS), which he sees as a cheaper investment alternative to archrival Amazon. Semiconductors and computer networking stocks Piper Jaffray analyst Ashok Kumar raised his earnings estimates for Advanced Micro Devices (AMD). In a note to clients released Monday, Kumar said strong processor shipments are expected to have driven revenue up 31 percent year over year to $805 million, generating earnings per share of 21 cents. That compares to Kumar's previous revenue estimate of $800 million and earnings-per-share estimate of 13 cents. The company is expected to report December quarter results on January 13, after the market close. Advanced Micro shares rose 3 7/8 to 31 7/8. Among other chip makers, Lam Research (LRCX) rose 2 1/4 to 29 1/2 and Intel (INTC) gained 10 1/16 to 139 3/4. Prudential Securities analyst James Barlage raised his 12-month price target for the chip maker. Intel is scheduled to report earnings after the close of trading on Tuesday. Barlage raised his target to $180 from $135 and set a 24-month price target of $220. In a note to clients he said Intel's earnings could expand at a 25-percent to 30-percent compounded average annual rate during the next few years. A strengthening semiconductor sector that could continue to drive interest in the group. A stock split that could also be in the offing. "During the next few years, we expect Intel's earnings to be driven by reasonable sales growth, expanding gross and expense margins, and a continuing share buyback program," Barlage said. Baker likes Dallas Semiconductor (DS), which he described as a "second or third tier" chipmaker that could be a takeout candidate. Among networking companies, Cisco Systems (CSCO) slipped 2 to 104 11/16. Lucent Technologies (LU) is in talks to acquire Ascend Communications (ASND) in a deal valued at over $16 billion, according to a report in the Financial Times. Separately Lucent agreed to buy Kenan Systems Corp., a billing software maker, for $1.5 billion. Shares of Lucent fell 2 5/16 to 112 15/16. Ascend shares were up 5 1/4 to 76 11/16. See full story. and see Tech Report. In this group, Baker is impressed with Newbridge Networks (NN) and Northern Telecom (NT). Bell Canada (BCE) is a cheaper way to play Nortel, he said, as the company is 50-percent owned by Nortel. The analyst's favorite telecom stocks, due to the possible benefits they'll derive from the Internet, are Bell Atlantic (BEL), SBC Communications (SBC), McLeod (MCLD) and Cincinnati Bell (CSN). Baker thinks Cincinnati Bell could be a takeover target. Hardware and software Among hardware makers, International Business Machines (IBM) rose 1 11/16 to 189 1/4. Dell (DELL) climbed 4 3/16 to 82, Compaq Computer (CPQ) rose 3 to 48 3/8, while Hewlett-Packard (HWP) fell 1 1/16 to 72. Apple Computer (AAPL) rose 7/8 to 45 7/8. Sun Microsystems (SUNW) added 3 1/8 to 94. Baker recommends option plays on Compaq, Dell and Apple. Among software companies, Sybase (SYBS) fell 1/16 to 6 15/16 and Computer Associates (CA) fell 1 1/8 to 47 1/2.Oracle (ORCL) was up 15/16 to 47 3/16. Banyan (BNYN) shares jumped 3 1/2 to 17 15/16 after the company said it has formed a partnership with Microsoft (MSFT) that will also include an investment by the world's largest software company. See Software Report Broadcast.com (BCST) shares jumped 53 1/2 to 251 after it set a 2-for-1 stock split. On Friday the stock rose amid positive brokerage comments following the Web-based audio and video program aggregator's presentation at an investment conference. Stephanie O'Brien is a reporter for CBS MarketWatch.