By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Tech stocks rallied Thursday, led
by big gains from Facebook Inc. after the world's largest
social-networking company reported quarterly results that blew past
Wall Street analysts' forecasts.
Facebook (FB) shares surged 26%, to $33.37, in the wake of the
company's second-quarter earnings report, which came out late
Wednesday. The company said sales rose 62% from a year ago, led by
growth in mobile usage, and it reported a profit of $333 million,
turning around from a loss in last year's second quarter.
Analyst Ken Sena, of Evercore Partners, raised his rating on
Facebook's stock to overweight from equal weight, and lifted his
price target to $34 a share from $26. In a research note, Sena said
Facebook's results "support the view that positive ad pricing
inflection occurred in the quarter," and should help the company's
share price rise in the months ahead.
Among other leading tech stocks, Qualcomm Inc. (QCOM) shares
rose 4.5%, to $64.16. After Wednesday's market close, the wireless
chipmaker reported upbeat fiscal third-quarter results and gave a
better-than-expected fourth-quarter forecast. Qualcomm said its
results were boosted by strong sales of chipsets for mobile
devices.
However, Citigroup analyst Glen Yeung cut his rating on
Qualcomm's stock to neutral, saying in a research note that the
market for high-end smartphones is reaching a point of
saturation.
Online travel site TripAdvisor Inc. (TRIP) saw its shares rise
more than 14%, to $70.06, and Chinese Internet company Baidu Inc.
(BIDU) was up by more than 10%, at $125.05. Both companies reported
quarterly results that topped Wall Street analysts' forecasts.
Networking-equipment maker F5 Networks Inc. (FFIV) was also on
the rise, as its shares climbed more than 10%, to $89.76, due to an
upbeat fiscal third-quarter report and fourth-quarter outlook.
Amazon.com Inc. (AMZN), which reports second-quarter results
after the close of trading, edged up by 48 cents a share to
$299.20, while online social-gaming company Zynga Inc. (ZNGA) rose
more than 7%, to $3.51 a share, in advance of its earnings results,
also due after the market close.
Other gains came from Pandora Media Inc. (P), up 5% at $18.80 a
share, as well as Yelp Inc. (YELP) and Akamai Technologies Inc.
(AKAM), both of which saw their shares rise 3%.
The Nasdaq Composite Index (RIXF) rose 12 points to 3,592, while
the Philadelphia Semiconductor Index (SOX) dipped into the red.
Notable losses came from computer hard disk-drive makers Western
Digital Corp.(WDC) and Seagate Technology (STX). Both companies'
shares fell more than 5% Thursday.
The decline were due to those companies' earnings reports. On
Wednesday, Western Digital said its fiscal fourth-quarter earnings
fell 44% as it shipped fewer hard drives from the same period a
year ago. Seagate, which also reported results on Wednesday, gave a
revenue outlook that raised concerns about the growth rate of its
cloud-storage business.
Analyst Christian Schwab at Craig-Hallum cut his ratings on both
Seagate and Western Digital to sell from hold following those
companies' results.
Online professional-services referral company Angie's List Inc.
(ANGI) fell by more than 9%, to $24.01 a share. On Wednesday,
Angie's List reported second-quarter results that met analysts'
forecasts. Some analysts raised concerns about Angie's List's
marketing expenses continuing to rise.
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