Why's everybody buying Apple?

And Apple Computer (AAPL) has gotten a big boost from this phenomenon, despite the lack of a specific game plan or new product lines at Macworld Expo in Boston, where Apple cofounder Steve Jobs gave the keynote address yesterday.

The troubled computer maker's stock has shot through the roof in the past two days--rising nearly 52 percent to a high today of 30 on tremendous volume of 23.7 million shares.

But as investors pour money into Apple shares, analysts say the fundamentals of the company's performance have not changed since it announced yesterday that Microsoft will invest $150 million to develop and ship future versions of its Microsoft Office, Internet Explorer, and development tools for the Macintosh over the next five years.

And they note that its boardroom restructuring does not directly translate into growth for Apple's declining market share and revenues. But what Macworld did create was a perception that Apple will be viable going forward, analysts said.

"What Jobs is creating is a vision that Apple can survive," said Eugene Glazer of Fortis Advisers. "What we saw here was a formidable competitor willing to invest in Apple...if they were willing to do it, people were saying, then maybe we should too."

With the Microsoft investment in hand, Glazer said software application developers and eventually consumers may regain their confidence in the company--something that would indeed drive up sales and market share. But that's far from certain.

"I think the stock is overreacting to the news," Glazer said. "These moves are in a good direction, but I did not hear a coherent strategy on addressing the fundamental problems of Apple. There is so much real work that has to be done, and they need to find a new chief executive."

Some analysts remain optimistic. "There is a concern among the user base about Apple's financial viability, and with the infusion of funds, there is a perception that this will bring stability to the company," said Michael Geran, an analyst with Pershing.

Daniel Kunstler, with J.P. Morgan Securities, raised his recommendations on the stock today. He said there had been a widely anticipated fear that Microsoft would no longer support its popular Office software suite for the Macintosh platform, but those fears were quelled after the investment.

Analysts have made a number of earnings estimate revisions and changes to Apple recommendations in the past two days, but it's largely been a wash.

The consensus for fiscal 1997 has remained the same, for a loss of $2.98 a share. The range of estimates tightened up to a loss of $2.79 to $3.14 a share from a previous gap of $1.95 to $3.63 a share, according to First Call.

And for fiscal 1998, the consensus of a 33-cent-per-share loss fell to 32 cents after analysts revised their numbers. Analysts now expect a loss in the range of 55 cents to a profit of $1.01.

Six analysts reiterated their recommendations, while two upped their advisories to "buy" from previous recommendations of a "strong sell" and "neutral," according to First Call.

Kunstler was one who upped his recommendation to a long-term "buy" from "market performer." He cited the Microsoft "endorsement" of Apple as the reason for his increased recommendation.

Analysts sizing up the Macworld news said that complaints from clone makers that Apple is slow in issuing them licenses to its new operating system were apparently discounted by the Microsoft investment. Analysts noted that the licensing issue can be viewed as either good news or bad news.

Apple needs critical mass to encourage developers to design applications for its platform, but it is also facing a situation where clone makers, though helping to build up the overall Macintosh market, are also stealing away Apple customers.

Kunstler, however, considers Apple's licensing strategy an important area for investors to examine.

"It's not like we're singing, 'Glory, glory,'" Kunstler said. "I think they need a coherent strategy on their licensing. It seems that Apple does not have that right now and that is one of the risks."

Analysts had a mixed reaction to whether Apple will take a more aggressive stance on furthering its efforts in the network computer arena, following the announcement that Larry Ellison, chief executive of database marker Oracle, will join the Apple board. Ellison has been a strong supporter of the NC concept.

Apple, which has developed thin client devices like its Pippin and eMate, may expand its NC efforts into its core education market. And although NCs tend to carry lower profit margins, analysts said the greater profits may lie in bundling them with application software, much like Oracle is planning with its server software.

However, Apple gutted its server efforts when it reorganized its operations earlier this year.

Kunstler said Apple will have to recast its server efforts, as one means for beefing up profits if it takes a larger step into the NC arena.

Meanwhile, Glazer said its hard to determine whether selling NCs to the education market will be as profitable as shipping individual PCs to the schools.

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