Palm (PALM) was up 8.9% in preopen Island trading. This morning UBS Warburg upgraded the handheld computer maker to strong buy from hold, citing the company's "aggressive action" on inventory problems. The comment boosted the stock after it fell nearly 30% Friday, hitting an all-time low of $4.71.

Late Thursday, Palm warned fourth-quarter revenue would be just $140 million to $160 million, well below its earlier forecast of $300 million to $315 million. The company cited holdups in deliveries of its latest models.

Rival

Handspring

(HAND)

also suffered from the news Friday, falling to a new low of $8.50. Handspring was unchanged preopen this morning.