NEW YORK (CNN/Money) - Are we seeing a return to irrational exuberance for Internet stocks? Or is Wall Street really taking a more clear-eyed look at the sector?

The answer: probably yes.

While stocks such as Google and Overstock.com have been racing higher after posting strong quarterly earnings, others such as Amazon.com and Netflix are being punished by investors who expected better.

In its first-ever quarterly earnings announcement, Google late Thursday said its paid search business is paying off big time. Third-quarter earnings and revenue at the Mountain View, Calif., search firm both doubled.

Google's blowout results propelled its shares more than 13 percent higher in Friday morning trading. Prudential Equity Group analyst Mark Rowen raised his 2004 and 2005 earnings estimates for Google and raised his price target on the stock from $130 to $200. Analyst John Tinker of ThinkEquity Partners also raised his target to $200.

If that's sounds reminiscent of the late 1990s, when Merrill Lynch analyst Henry Blodget slapped a $400 price target on Amazon shares, its important to note some significant differences.

First, even analysts who are more sanguine about names such as Google or Yahoo point out that their earnings and cash flows are real, unlike five years ago when Internet companies preferred to point to fuzzy metrics such as "eyeballs."

"It's not that things are perfect, and you could argue that things are still early in the history of the Internet," says analyst Martin Pyykkonen of Janco Partners, "but the business models that are built on it are more real and concrete."

Second, however, is that investors are wary of current valuations.

Pyykkonen has a market-perform rating on Google and a fair-value range of $125 to $140, well below the stock's current levels. He notes that post-IPO lock-ups will expire in coming months, giving investors, employees and executives a chance to dump some shares--and perhaps dent the stock price.

Google is certainly not the only Net name surging. "There's a lot of investor money chasing the obvious, well-known names," Pyykkonen says.

Yahoo is near a 52-week high and has gained more than 58 percent in 2004.

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eBay is at a 52-week high, up more than 79 percent over the past year. Meg Whitman's online auction house boosted its sales and profit forecast for 2004 this week and reported third-quarter earnings grew 76 percent to $182 million, higher than Wall Street expected. "eBay has become perceived as the safest stock in the Internet space," says Pyykkonen. That's one reason it comes with a P/E above 90.

Shares of Overstock.com were up sharply on Friday after announcing that its third-quarter revenue rose 79 percent to $103.4 million. The Salt Lake City-based online discount retailer posted a net loss of $3 million, down from a loss of $3.7 million last year, as gross margins showed improvement.

Short-sellers have targeted the stock, though, and short interest had risen to more than 3.7 million shares as of early September.

"There is probably some short covering that is exacerbating the run-up a little bit," says analyst Frank Gristina of Avondale Partners, which makes a market in the stock. "But I don't want to diminish the performance in the quarter--they certainly delivered."

Amazon.com, on the other hand, is a familiar Internet name that has suffered in recent months. Its stock price is near the bottom of its 52-week range. Shares plunged more than 10 percent early Friday as Wall Street reacted to the retailer's disappointing third-quarter earnings and softer-than-expected outlook for 2005.

After Thursday's bell, Amazon reported third-quarter earnings of $54.15 million, or 13 cents a share, up from $15.6 million or four cents a share, last year. Wall Street was expecting more though, and Amazon's forecast for full-year sales was disappointing as well.

Operating margins remain a concern for Wall Street. Amazon announced that it would continue to try to draw customers with its offer of free shipping, but analysts worry that will make it difficult for the retailer to grow margins.

"Amazon insists it is still on the path to double-digit operating margin, despite the fact the 2005 guidance distinctly suggests a reversal of this course with declining incremental operating margin," Piper Jaffray analyst Safa Rashtchy wrote in a research note Friday. "Clearly, something is amiss here." He said he would buy the stock at $30, nearly 25% below where it stands now.

That hardly sounds like exuberance, irrational or otherwise.