NEW YORK (CNNMoney.com) - Just a few years ago, Sun boasted serious Silicon Valley cachet. Getting a job there was one of the more coveted gigs in Silicon Valley, and its stock price soared.

Then the tech bubble burst. At their peak, from 2000 to 2001, Sun's shares traded north of $40. But they plunged sharply after that and haven't traded above $10 since 2002. The shares closed yesterday at $4.39.

Sun (Research) reports its fiscal second quarter earnings today after the closing bell; analysts are expecting revenues of $3.48 and a loss of one penny per share.

While few Wall Street analysts are bullish on Sun, the company is making big moves, including a spate of new hardware products as well as making its entire suite of software products "open source," meaning that anyone can download and use its source code.

Giving one's product away for free may not seem inherently logical for a company in Sun's financial shape, but analysts say it's a savvy strategic move meant to help Sun grow a profitable business dedicated to servicing the software, in much the same way Red Hat has done with the open-source Linux operating system.

"There is a lot of buzz now about Sun like there was about Apple two years ago at the Consumer Electronics Show," said Larry Singer, a Sun senior vice president in charge of marketing. "Technology is a high fashion industry, and I think we are in fashion again."

The company is inking deals with strategic partners including Oracle (Research) and Google (Research), whose CEO, Eric Schmidt, used to work for Sun. Oracle just committed to a new, 10-year partnership with the Java community; Sun developed the Java programming language.

Sun also announced a deal with Google last year to distribute its Star Office software – its suite of office productivity software – free via the Google Toolbar.

"I'm much more bullish on them this year than I was a year ago," said Laura DiDio, an analyst with Yankee Group. "They are making some very strong, bold, and decisive moves to get themselves back on track. 2006 is going to be very interesting."

But will that buzz eventually translate into bucks? Or is this too little, too late from a long-suffering company with a battered stock price?

While some analysts have suddenly gotten a lot more bullish on the company, even they concede that profitability may still elude it for some time. According to Thomson/First Call, only three analysts it surveyed have a "buy" or "strong buy" rating on the stock. About 13 have a "hold" rating, while another seven maintain a "sell" or "strong sell" rating.

Sun's Singer maintains that Wall Street analysts, who criticized Sun for its research and development spending post-bubble, missed the point.

"The Street's not very good at picking strategic winners when they are focused on new better processes," he said. "They are focused on operational issues. For them, instead of looking at R&D in terms of growing Sun, they said, 'There's $2 billion you didn't have to spend.' It's kept our stock price artificially low."

Singer said the company's plan all along was to continue its R&D spending to develop a two- to five-year technology advantage, and he said the spending is now producing fruit in virtually every area of the company.

"These last few years we've been saying just wait you'll see," he said. "Now we're saying we've got it, now it's time to buy it.

Mark Stahlman, technology analyst at Caris & Co., said Sun has developed products that give them a big technological advantage, including its Niagra and Galaxy servers.

He also believes, as do other financial and technology industry analysts, that 2006 could prove to be a higher than expected year for IT spending. He thinks that much of that increased spending could go for advanced server technology, which would boost Sun.

But despite his optimism about Sun's new technology, Stahlman still maintains a hold rating on the stock, saying the company is not giving investors and analysts useful guidance or a clear financial picture.

Brent Bracelin, an analyst with Pacific Crest Securities, agreed. Bracelin praised what he called Sun's most radical shift – making its hardware "platform agnostic," meaning it would run non-Sun software programs like Windows and Linux, as well as trying to make its operating system, Solaris, compatible with hardware made by other companies.

He thinks that could bring back customers who left Sun, but he's not sure if that's enough to drive a financial resurgence in the near term.

"The technology picture is much clearer; the financial turnaround story is less clear," he said.

Keith Bachman, Bank of America Securities, wrote in a note to clients that while he and his team have been eyeing Sun as a potential turn-around story, "we see no evidence that revenue growth or cost cuts is enough to move us to a more bullish posture... We are skeptical of the company's ability to grow the business in a meaningful way in the absence of continued new product introductions."

Though the analysts interviewed for this story are bullish on Sun's technology, the acknowledge that Sun faces tough competition from HP and IBM.

The company will also have to battle the perception that it can never regain its former glory, said Yankee Group's DiDio.

"The biggest hurdle factor is, can they come back?" she said. "Linux played Pac Man with their market share. But they have some tremendous technology, and they are doing everything they can to address those business issues."

Pacific Crest's Bracelin said that while he thinks the company is doing all the right things from a technology to standpoint, it's too early to say whether that makes Sun a good investment.

"This is a turnaround story; there's lots of variability," he said. "Rarely do these stories happen overnight."