SAN FRANCISCO -- He was one of the analysts voicing caution regarding Dell's (DELL) - Get Report fourth-quarter earnings. Now, Piper Jaffray's Ashok Kumar is saying 1999 could be the year of the cow in an upgrade of Gateway (GTW) .
Kumar upgraded Gateway to strong buy from buy and raised its price target to between 95 and 100 from 56. He upped the first-quarter earnings estimate to 90 cents a share from 59 cents, compared with the
estimate of 60 cents. He also upped estimates for fiscal year 1999 to $3.87 from $2.82 vs. the $2.79 estimate from First Call. Gateway was up 6 1/8, or 8.4%, to 79 in early trading.
In the report, Kumar said that the aggressive expansion of Gateway's Country Stores, which focus on consumers and small to medium-sized businesses, will help Gateway offset a seasonal slowdown normally seen in the first quarter. Kumar indicated that "higher customer acquisition costs and cannibalization of tele-sales will be a dark-cloud cover longer term."
An announcement from Gateway late Friday that it would be using
Advanced Micro Devices
as its second supplier of chips, is helping that stock. AMD was up 1 1/2 at 19 1/8 in early trading.
Rambus on a Roll
, which rallied following positive comments from
Morgan Stanley Dean Witter
analyst Mark Edelstone on
Friday, is extending gains after more kind words from analysts.
BancBoston Robertson Stephens
upgraded Rambus to buy from attractive with a 90 price target, while
Warburg Dillon Read
initiated coverage of Rambus with a strong buy rating.
Rambus was up 7 1/4 at 78 1/4 in early trading.
On the Merger Front
A number of mergers are brewing in the Internet world. Internet software retailer
announced it would acquire
, another software retailer, in a stock-for-stock transaction. Beyond.com was up 1 3/8 at 26 1/8 in early trading.
has purchased a minority interest in
, a provider of software and service solutions for the wireless communications industry. In early trading, Amazon.com was 1 3/4 higher at 103 5/8, while Geoworks was up 3/8 at 4 5/16.
announced it was buying Web auctioneer
for 50,000 CNet shares. CNet was trading 1/2 higher at 116 1/2 early.
Now Appearing in San Francisco
The BancBoston Robertson Stephens technology conference gets under way this morning with some big names right off the bat. Both
are among the first presenters, while
also present this
morning. TSC will provide updated
commentary on the conference throughout the week.