Amazon.com stock spikes

Amazon.com (AMZN) stock was up almost 20 percent today on an analyst's initiation of coverage as an "outperform" stock.

Shares of Amazon rose to 47-3/8, closing up 7-7/8 points.

Mary Meeker of Morgan Stanley Dean Witter released a report after Amazon.com's first analyst meeting in Seattle in which she detailed her enthusiasm for the online bookstore.

Morgan Stanley's opinion that Amazon will outperform the market in the long term is based on confidence in Amazon's early entry into the market and public enthusiasm for the product.

"We are making a long-term bet with this company--We don't want to miss this one. In our opinion, the risk of missing a big winner in [Amazon] is greater than suffering from what may become a near-term valuation, or perhaps execution problems," Meeker wrote in her report.

She addded that Amazon is expected to be among a handful of companies to be "big beneficiaries" in the $84 billion worldwide book sales market as online sales grab an increasing share of the industry.

Meeker said she expects the company to hit profitability in 1999.

Amazon's initial public offering of 3 million shares skyrocketed above the underwriter's targeted $18 asking price, closing its opening day of trading at $23-1/2 and raising $54 million for the company.

The stock has responded favorably to analyst coverage before. Shares spiked in early July after an analyst at Alex Brown initiated coverage of the company with a "buy" recommendation.