Google surges to new high; AMD slides

Getty Images Enlarge Image Google shares hit a record high.

SAN FRANCISCO (MarketWatch) — Tech stocks posted strong gains Friday, helped by Google Inc. soaring to a record high and Amazon.com rising following an upgrade from UBS.

The Nasdaq Composite Index (COMP)  rose 1.3% to close at 3,914 while the Morgan Stanley High-Tech Index (MSH)  gained 1.5% and the Philadelphia Semiconductor Index (SOX)   was up 0.3%.

Google (GOOG)  shares jumped 14% to close at $1,011.41 after the Web search giant beat Wall Street's forecasts with third-quarter earnings that rose 36% from the same period last year. The company's core advertising business saw strong growth despite continued losses from its Motorola division. Analysts cheered the results, with nearly two dozen boosting their price targets on the stock to above the $1,000 mark.

Click to Play What's pushing Google?

Google shares move to record territory after reporting a surge in mobile-ad sales.

"It's now 15 Q's in a row that Google has generated 20%+ organic core revenue growth: impressive at this size," wrote Mark Mahaney of RBC Capital in a note to clients.

Mahaney raised his price target to $1,100 from $1,020, adding that, "Google continues to be well positioned for the dramatic mobile shift with Android, and we believe Enhanced Campaigns will be a positive revenue driver with a nice, long ramp."

Google's run seemed to give a boost to other Internet stocks. Facebook (FB)  shares climbed nearly 4% to close at $54.22 while Yahoo (YHOO)  rose 2.1% to close at $33.43.

Amazon.com (AMZN)  added 5.8% to close at $328.93 after UBS analyst Eric Sheridan upgraded the stock to buy from neutral. In a note, Sheridan cited factors such as expectations for revenue growth increasing in the fourth quarter and beyond, as well international expansion of Amazon's Kindle ecosystem and its "underappreciated advertising business." Sheridan raised his price target on the stock to $385 a share from $305.

On the downside, Advanced Micro Devices (AMD)  shares fell about 14% to close at $3.53 after the chip maker's own third-quarter results on Thursday afternoon. The results and forecasts topped Wall Street's estimates, but analysts said investors may have been expecting a bigger "beat" given the coming launch of new gaming consoles from Sony and Microsoft next month that use AMD chips.

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"While AMD's revenue and EPS results/guidance were above consensus, investors are unlikely to be impressed, presumably because a more substantial beat was expected in light of AMD's new gaming momentum," wrote Glenn Yeung of Citigroup in a note to clients. He trimmed his price target on the stock to $4.50 from $5, writing that "with momentum now seasonally slowing, we find little reason to become excited about AMD at this time."

In IPO news, Voxeljet (VJET)  shares more than doubled to close at $28.80 in the IPO of the German company that makes 3-D printers. The stock priced at the low end of its expected $13-$15 range.