Good Morning Silicon Valley

You wouldn’t know it by the market today, but JPMorgan’s Internet analyst Imran Khan and team see good things ahead this year for the big Net stocks — publishers, portals, commerce sites and search engines should continue to outpace the rest of the stock market handily. “We expect revenue growth to decelerate to 21.2% in 2008, from 25.6% in 2007,” Khan wrote in the report released early this morning. “We are projecting 34% earnings growth for our coverage universe, compared to 8% for the S&P 500.” The report says there’s enough free cash floating around among the big players to fuel more merger and acquisition activity and a stock buyback or two. Search advertising will grow at an annual rate of 28% over the next four years, Khan said, and would reach $60 billion by 2011; the average cost per ad should also pick up this year. And in a context where the label “overweight” is a compliment, JPMorgan pins the tag on six favorites: Google, Yahoo, Expedia, Omniture, Shutterfly, and Monster.com.

Elsewhere among the crystal-ballers:

* Citigroup analyst Mark Mahaney turned loose his projections for the year on the Net, making two notable ratings changes. Mahaney moved Amazon up from “hold” to “buy” and dropping IAC/Interactive from “buy” to “hold.”

* Bank of America chip analyst Sumit Dhanda looked at the outlook for Intel and AMD this year and didn’t see anything to get excited about, downgrading Intel from “buy” to “neutral” and AMD from “neutral” to “sell.”

* Last year’s resurgence in tech IPOs, including VMware’s auspicious debut (see “Does this bandwagon come with airbags?“), has venture capitalists optimistic. A National Venture Capital Association survey found that 59% of venture investors expect the IPO market to be even stronger in 2008 and nearly three-quarters expect merger-and-acquisition transaction values to either increase or remain the same.