A year ago Silicon Valley Bancshares in Santa Clara, Calif., was a fallen star on Wall Street: A major pile-up of bad technology loans had spooked investors, management's credibility was being questioned, and the company's stock had sunk to a 52-week low.

How times have changed. Shares of Silicon Valley, a $4.6 billion-asset company that lends to early-stage technology companies, are on an outrageous run. After hitting a 52-week low of $16.375 last April 23, Silicon Valley's stock has skyrocketed 428%. And with the release of Silicon Valley's mid-quarter results late Wednesday - highlighted by the disclosure of extraordinary warrant income gains - market observers are predicting that the stock will soon top the magic $100 mark.

The company said it has pocketed $65.5 million from investments in upstart technology companies this year and predicted it could earn $165 million by yearend. Almost immediately after the announcement, Prudential Securities Inc. raised its 12-month price target to $115, and Dain Rauscher Wessels Inc. raised its target to $105, and both companies reiterated their "strong buy" ratings.

As for Silicon Valley's stock surpassing $100, "The question is not if, but when," said Joseph K. Morford 3d, an analyst at Dain Rauscher Wessels in San Francisco who is so bullish on Silicon Valley that he's calling it his "best idea" among bank stocks for 2000.

"I wouldn't bet against it," said David Winton, an analyst at Keefe, Bruyette & Woods Inc. in New York.

Of course, there are some naysayers. Deutsche Banc Alex. Brown analyst Mark C. Alpert cut Silicon Valley's rating from "buy" to "market perform," on the belief that Silicon Valley stock may have finally hit its peak. This stock, by far the best performing bank stock of 1999, has soared another 75% since Jan. 1. It closed at $86.4375 on Thursday.

Silicon Valley earned $33 million from its stakes in tech start-ups in 1999, compared with $6.6 million in 1998.

In the mid-quarter update, the company said it had warrant positions in 932 companies - many of which are not yet publicly traded - up from 853 companies at year-end 1999.

Silicon Valley obtains warrants in venture capital-backed start-ups it believes will make it to Wall Street. Those warrants are converted to shares after an initial public offering and are typically sold for huge gains six months later. Stocks of some of Silicon Valley's clients that recently completed IPOs - such as Clarent Corp. in Redwood City, Calif., San Francisco-based Digital Island - have jumped more than fivefold since the companies went public.

Obviously Silicon Valley is benefiting from a venture capital industry flush with capital.

In 1999, venture capital investments reached a record $48.3 billion, a 151.6% increase over 1998, according to figures released by the National Venture Capital Association and Venture Economics, a division of Thomson Financial Securities Data. San Francisco-based VentureOne Corp. reported that $19.4 billion was raised in 248 venture-backed IPOs in 1999 - double the record set in 1996.

"Silicon Valley is in such a sweet spot," said Eva A. Radtke, an analyst at Prudential Securities. "No bank is poised to benefit more."

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