Big winners so far include Blue Nile (NILE), up 73 percent; Expedia (EXPE) up 68 percent; and Amazon (AMZN) up 44 percent. Moderate winners, comparatively speaking, include Google (GOOG) up 27 percent; eBAY (EBAY) up 21 percent; and Yahoo (YHOO) up 22 percdent.

Here’s the full breakdown of the 16 Internet stocks Mahaney covers (click table below to enlarge):

I usually steer well clear of opining/guessing about stock prices and the like, but I think it’s worth considering Mahaney’s note, both for his explanation and for the potential impact of the stocks’ run.

The explanation: Part of this is basic what-goes-down-must-go-up market yo-yoing–Internet stocks got pummeled worse than the rest of the market last year so it’s easier for them to bounce back. But Mahaney also thinks that most of the stocks he follows are going to turn in the worst performance, earnings-wise, in the quarter we’re in now. Investors like that because it means that things can only get better.

The impact: Remember the old days when public companies could use their shares as currency to acquire smaller companies? Well, we’re not headed back there quite yet. But a sustained rally sure could kick-start the M&A market, which will make things more interesting for the likes of me, at the very least.

[Image credit: joshmadison]

Ergo, you can see why American Technology Research analyst Tim Boyd this morning warned that Blue Nile (NILE)–an online diamond retailer–could suffer a big miss in the fourth quarter. He writes that checks find jewelery retailers had a “horrid” October and November. He says his checks confirm the obvious: “folks aren’t buying a whole lot of jewelery these days.” He says retails stores have seen a huge drop in traffic, with “virtually zero interest at higher price points.” He says some couples may even be postponing engagement plans due to job insecurity and general economic uncertainty.

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Mahaney notes that AMZN shares have surged “as much as 36 percent” since it reported Q3 results, “primarily due to growth rates that are surprisingly strong in a severe recession, but also due in part to increased enthusiasm for its Kindle product.” But he notes that consumer spending data points from other e-commerce companies, like recent cautious comments form Expedia and Blue Nile, have become consistently negative.

Mahaney did not change estimates, but sees increasing risk to the Street consensus. For Q4, he sees EPS of 40 cents, below the Street at 44 cents. For 2009, he sees $1.50, below the Street at $1.59.

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The one research item of note comes from Lehman’s Douglas Anmuth, in a survey of the outlook for Internet stocks generally. Not a lot of new ground, but he did note that “certain online retailers have begun to see a pronounced slowdown,” including Blue Nile, “which despite consistently strong execution and a large market opportunity…has been negatively impacted by reduced discretionary spending on high-ticket luxury items.”

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