By Benjamin Pimentel, MarketWatch
SAN FRANCISCO (MarketWatch) -- Yahoo Inc. shares jumped sharply
Wednesday, partly on the Web portal's upbeat gains in its core
business, but mostly on the reaccelerated growth in Alibaba, the
Chinese Internet giant in which it owns a huge stake.
Yahoo (YHOO) shares climbed 6.5% to $36.43, their best day in
nine months.
"Holy Alibaba," Bernstein Research analyst Carlos Kirjner told
clients in a note. "Alibaba crushed expectations posting
year-over-year revenue growth of 66% and massive margin
expansion."
The Yahoo report is also expected to give Alibaba's
much-anticipated initial public offering a boost. Yahoo owns a
roughly 24% stake in the company, which has announced that it is
planning an IPO in New York.
Wells Fargo analyst Peter Stabler upgraded Yahoo to outperform,
citing Alibaba's gains, and "a belief that Yahoo core result
improvements (although modest) should lead to a re-rating of
investor valuation of the company's core assets, where we believe
the company's still impressive audience scale and progress on ad
platform redesign holds potential for further acceleration of
display growth."
Yahoo's display business, which has been struggling, posted
better-than-expected results, which some analysts say could be a
modest, early sign that the Web portal's turnaround plan, under
Chief Executive Marissa Mayer is working.
RBC Capital's Mark Mahaney maintained an outperform rating on
Yahoo, telling clients in a note that Yahoo's earnings results
"certainly don't suggest any negative-inflection fundamentals,
which the market appears to be expecting for a few too many Net
stocks, given the recent very broad correction."
Also rallying were shares of Google Inc. (GOOGL), which were up
2%. The Internet powerhouse was scheduled to report first-quarter
results after Wednesday's closing bell.
Intel (INTC) also climbed 0.3% after the company reported
slightly better-than-anticipated gross profit margin. On the
downside, shares of Twitter (TWTR) were down 2%.
The Nasdaq Composite Index (RIXF) gained 38 points to 4,071. The
Philadelphia Semiconductor Index (SOX) was off a fraction.
Other stories from MarketWatch:
Weibo IPO hit with warning of 'fast money'
Yahoo rallies on strong display, Alibaba results
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