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Rambus stock on rampage
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March 22, 2000: 2:58 p.m. ET
Chip technology provider's stock up 23 percent after Morgan Stanley upgrade
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NEW YORK (CNNfn) - Shares of high-speed chip interface technology provider Rambus soared after Morgan Stanley boosted its price target to $500.
In afternoon trading Wednesday, Rambus (RMBS: Research, Estimates) rose 61-9/23, or 23 percent, to 328-1/8.
Morgan Stanley Dean Witter analyst Mark Edelstone upped the Mountain View, Calif.-based firm to $500 from $266.
 Rambus creates and licenses high-speed chip interface technology used to speed the performance and cost-effectiveness of computers and electronics.
In his research note, Edelstone attributed several factors behind his upgrade, such as support of the company's technology by Intel (INTC: Research, Estimates) and the use of its products in the hugely successful launch of Sony's PlayStation 2 in Japan.
"Intel advocated the support of Rambus technology at the Intel Developer Forum ... and invested $250 million in Infineon for the support of Rambus technology," Edelstone said.
"Based on its overall business model and long-term growth opportunity, we believe that Rambus has one of the most attractive intellectual property franchises in the semiconductor industry ... we believe that Rambus' net margins will probably end up becoming one of the highest profit margins ever enjoyed in the semiconductor industry."
Deutsche Banc Alex. Brown analyst Erika Klauer told CNNfn.com that Rambus was a factor in her upgrade in Micron Technology's (MU: Research, Estimates) stock Wednesday.
"We're seeing very favorable additions to Rambus technology - what Rambus technology does is reduce the net supply of DRAMs because they're bigger chips and so net supply ends up going down," Klauer said. 
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