Shares of Facebook (Nasdaq: FB), the No. social media website, surged as much as 9 percent Monday after two major investment firms upgraded their ratings.
In late trading, Facebook shares were at $25.91, up $1.91, after reaching $26.09 earlier. Since the May 17 initial public offerings, shares had fallen as low as $17.55 from their initial price of $38.
At Bernstein Research, analyst Carlos Kirjner upgraded his recommendation to “outperform” with a price target of $33 because he expects the Menlo Park, Calif., company to successfully tap mobile applications to boost revenue, which he expects to reach nearly $7 billion next year and $8.65 billion in 2014.
Still, Kirjner said, “Facebook remains a risky investment” because so many things have to work correctly.
At Topeka Capital, analyst Victor Anthony kept his “buy” rating but increased his price target to $36 from $34, in part because it's passed through the period in which Facebook insiders were barred from selling their shares, greatly increasing the amount available.
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Anthony said he expects Facebook to benefit from successful use of ecommerce activity such as gift giving to stimulate more activity.