SAN FRANCISCO -- While shares of online retailer Amazon.com (AMZN) - Get Report, which last night posted a first-quarter loss that was narrower than expected, have declined sharply in early trading today, the rest of the Internet sector has mostly held its ground.
Investors have bailed out of Amazon shares faster than it takes to order a book on the company's Web site on concerns that its
expenses are growing faster than its revenue and that it's going to take a little longer than expected to turn a profit.
Despite positive comments from several analysts this morning stressing that Amazon remains positioned to be the dominant e-commerce site in the long run, Amazon.com was lately down 21 1/2, or 11%, at 172.
"Since inception, Amazon has maintained that it will opt for the right long-term strategic investment decisions, regardless of the near-term profit and loss impact," wrote
Credit Suisse First Boston
analyst Lise Buyer in a research note released earlier today. "We think that is the right strategy, but suspect today's stock performance will be instructive as to whether or not the current shareholder base agrees."
Buyer said that those who have been on the sidelines will have a better entry price and recommended that "long-term investors take advantage of any opportunity which may be about to present itself." Buyer has a 12-month target price of 193 1/2 on the stock.
Salomon Smith Barney
analyst Richard Zandi made two changes in his outlook for Amazon. Zandi upwardly revised net losses for the company in the next four quarters, but at the same time increased his 12-month price target on the stock to 220 from 175. Zandi told
he would recommend buying the stock even if it did not sell off today.
"It's attractive now," he said. "We wouldn't have raised our price target if we thought it wasn't attractive now."
While Amazon was down hard early on, the price action in the rest of the Net sector was not as bad as many had feared.
recovered from an early low of 179 to trade up 1 1/8 at 193 11/16.
bounced back from a low of 127 3/8 to trade up 3 5/8, or 3%, at 139 1/8.
, which reported better-than-expected third-quarter earnings Wednesday night, was up 6 1/4, or 18%, at 41 1/4 early on today. Credit Suisse First Boston upgraded the electronics contract manufacturer to buy from hold and raised its 12- to 18-month price target to 61 from 33.