By Rex Crum
Amazon.com shares outpaced the broader market for tech stocks
Monday after one analyst predicted opportunities for its Kindle,
downplaying fears Apple Inc.'s iPad had already made the electronic
reader obsolete.
Amazon (AMZN) shares gained $2.07, or almost 2%, to $119.59. The
Nasdaq Composite Index (RIXF) was up 0.3% to 2,148, and the tech
sector of the S&P 500 (SPX) added 0.4%.
Collins Stewart analyst Sandeep Aggarwal on Monday raised his
rating on Amazon's stock to buy from hold, mostly due to what he
said are opportunities for the Kindle and the company's Amazon Web
Services offerings for businesses. Aggarwal also set a price target
on Amazon's stock of $150 a share.
Aggarwal said that competition from the likes of Apple's (AAPL)
iPad is growing, and provided a challenge to the Kindle, which has
been on the market for a little more than two years.
However, Aggarwal believes the Kindle will remain a force in the
market because "the e-book revolution is much bigger than we
previously thought."
"Competition for the Kindle is rising," Aggarwal said, noting
that there are more than 45 e-book readers on the market. "[But]
the market remains in early stage of development and Kindle is one
of the most compelling e-readers."
Aggarwal added that for this year, Amazon will ship 3.85 million
Kindles, resulting in $2.5 billion in revenue, and will soon add
color and touchscreeen function to future models. Amazon currently
doesn't disclose how many Kindles it sells.
Tech gainers
Dell Inc. (DELL), Hewlett-Packard Co. (HPQ), Apple, Cisco
Systems Inc. (CSCO) shares also gained.
RightNow Technologies Inc. (RNOW) shares added 37 cents a share,
or 2.5%, to $15.38 after Robert W. Baird analyst Steven Ashley
raised his rating on customer-relationship management software
developer to outperform from neutral.
Ashley said RightNow's stands to benefit from a new software
product that lets corporate customers monitor customers'
conversations over social media networks in order to better
understand those customers' needs and frustrations.
Broadcom Corp. (BRCM) also got an upbeat assessment from
Citigroup analyst Glen Yeung, who initiated his coverage of the
chipmaker with a buy rating and a $35-a-share price target. Yeung
said that he believes Broadcom's strategy that includes focusing on
communications chips will help extend the company's growth
streak.
However, Yeung's take on Broadcom failed to build enthusiasm for
the company's stock. Shares fell 37 cents to trade at $29.02.