RALEIGH — Could it really be true than a year ago Red Hat stock was about as cold as frost on a Halloween pumpkin?


Could it be true that the Linux software crew is now hotter than “Texas Chainsaw Massacre”?

You bet.

Red Hat (Nasdaq: RHAT) surged a staggering 20.32 percent on Monday following two stock upgrades by Wall Street analyst firms. Red Hat closed at $12.97, up $2.19 on the day.

The stock added another 3 cents on Tuesday to close at $13.

Suddenly, the Raleigh-based company has a market cap north of $2 billion with a stock selling at three times what it did at a 52-week low of $3.84. The stock had slid even lower than that earlier in the month.

Wall Street analyst firm Blaylock gave Red Hat a boost on Friday by initiating coverage with a “Buy” rating.

But the Columbus Day shopping spree for Red Hat stock erupted when MacDonald Investments included the Hatters among several software companies raised to “buy” from “hold.”

“We expect to see system software outperform the broader technology market, especially in the beginning of an upturn in overall IT spending,” said analyst Brent Williams in his research note, as quoted by Dow Jones. Williams noted that software spending should exceed hardware spending in 2004 “for the first time in history.” Williams also pointed out he likes the opportunities for open source firms.

So despite the continuing SCO offensive against IBM over Unix code and possible fallout for Linux developers and users, Red Hat continues to march higher.

Its most recent quarterly earnings of 2 cents a share based on a record $28.8 million in revenue drove Red Hat stock up 68 cents to $9.08. The surge continued above $10 until Sept. 26 when a Deutsche Bank knockdown dropped the stock back to $9.78. Since then, more and more people are climbing on as Nasdaq surges and Linux continues to gain market share in enterprise sales.

The ups and downs of stocks and the fickleness of analysts can combine to create a nightmare for stockholders. For the moment, Red Hat is sizzling.

Rick Smith is managing editor of Local Tech Wire.