Oct. 8 (Bloomberg) -- Garmin Ltd., the biggest U.S. maker of car navigation devices, climbed as much as 5.1 percent on speculation the company may be bought by Microsoft Corp. and after an analyst raised his rating on the shares.

``There's speculation of Microsoft for Garmin,'' said Greg Palmer, head of equity trading at Pacific Crest Securities Inc. in Portland, Oregon.

Garmin spokesman Ted Gartner said the company doesn't comment about possible mergers or acquisitions. A Microsoft spokesman wasn't immediately available to comment.

Nokia Oyj, the world's biggest mobile-phone company, agreed Oct. 1 to buy Navteq Corp. for $8.1 billion to gain digital maps of 69 countries and compete with TomTom NV in the market for navigation devices.

``After Navteq was bought by Nokia last week there's only a few other pure plays in the mapping space, Garmin being one of them,'' said Mike Capitani, head of equity trading at Caris & Co. in New York.

Garmin shares fell by as much as 9.6 percent on Oct. 2 after American Technology Research analyst Rob Sanderson said the George Town, Grand Cayman-based company was ``vulnerable'' to competition from Nokia.

Sanderson today upgraded Garmin to ``neutral'' from ``sell,'' writing in a note to investors that competition from Nokia is unlikely to hurt Garmin through 2008.

He said the stock is attractive after dropping 19 percent in the three days following Nokia's announcement. Sanderson also wrote that Garmin may exceed analyst estimates when it reports third-quarter results on Oct. 31.

Garmin gained $4.75, or 4.6 percent, to $108.46.

To contact the reporters on this story: Eric Martin in New York at emartin21@bloomberg.net; Jeff Kearns in New York at jkearns3@bloomberg.net.

Last Updated: October 8, 2007 17:22 EDT