Tech Stocks Fire Up on Facebook IPO: Qualcomm, EA, Zynga Advance
Qualcomm Inc. (NASDAQ:QCOM), Electronic Arts Inc. (NASDAQ:EA) and Zynga Inc. (NASDAQ:ZNGA) lead the tech stock field Thursday, with many still considering Facebook Inc.’s bid for a $5 billion initial public stock offering.
After Qualcomm posted a 20 percent gain in its fiscal first-quarter earnings Wednesday, shares of the communications technology company rose $1.60, or 2.5 percent, to $61.04, MarketWatch said. Qualcomm expects revenue of $4.6 billion to $5 billion for this quarter, with adjusted earnings per share in the range of 91-97 cents, against analysts’ expectations of 89 cents a share on revenue of $4.49 billion for the period.
EA climbed $1.48 a share, or 8 percent, to $19.92, buoyed by brisk sales of the video game publisher’s new games, such as “Star Wars: The Old Republic,” which have boosted quarterly results to beat analysts’ expectations.
Dell Inc. (NASDAQ:DELL) was up 36 cents a share, or 2 percent, to $17.75. J.P. Morgan analyst Mark Moskowitz upgraded his rating on Dell to overweight from underweight and raised his price target on the stock to $21 a share from $17.50, saying he believes that “Dell is almost there, in terms of its revenue pruning,” according to MarketWatch, and Dell’s long-term earnings could begin to increase by 10 percent annually.
Facebook, which just filed on Wednesday or its initial public stock offering, was a hot topic of on Wall Street Thursday. If Facebook’s IPO attains its anticipated value of $5 billion, it would make history as the biggest Internet-stock debut ever.
Analysts disagree on the potential implications of Facebook’s IPO for the valuations of other so-called “Web 2.0” companies, but Zynga Inc., with its strong relationship to Facebook, was climbing Thursday, with shares up $2.19, or more than 20 percent, to $12.80. A large part of the online gaming company’s revenue comes from users playing games via Facebook. And in its filing, Facebook reported it derives about 12 percent of its sales from Zynga.
Zynga “is positioned to benefit from increasing social network user counts,” according to Michael Olson, who covers Zynga for Piper Jaffray. He added that growth in Facebook’s user base “represents an expanding total addressable market opportunity for Zynga.”