Posted By Rich Miller On August 22, 2007 @ 8:20 am In Investing | Comments Disabled
Data center stocks were among the best performing sectors  during 2006 and continued to outperform the broader market in the first half of 2007 . The recent market volatility has tested the staying power of data center shares, resulting in a more mixed picture. An analysis of the year to date shows that the majority of companies we track managed to outperform the Dow Jones Industrial Average, which is 5.3 percent higher for the year.
There are several high fliers, but these are primarily special situations – either recent IPOs like VMWare (VMW) and BladeLogic (BLOG) or companies that have accepted takeover offers and are waiting for the deals to close, a group which includes Opsware (OPSW) and Infocrossing (IFOX).
Once we look beyond the IPOs and deals, the strongest performers continue to be the data center operators that are expanding their facility networks to meet the demand for new space. These include Equinix (EQIX), NaviSite (NAVI), Savvis (SVVS) and Digital Realty Trust (DLR), which are all up between 10 and 17 percent for the year. That trend doesn’t hold true across the board, however, as shares of Terremark (TMRK), Switch and Data (SDXC) and Internap (INAP) are now in the red for 2007.
The biggest change has been the shift in investor sentiment regarding content delivery networks (CDNs). Akamai (AKAM) shares took a beating  last month after failing to meet analysts’ expectations, after which IPO sensation  Limelight Networks (LLNW) was pummeled after lowering its revenue guidance . While some industry watchers express concern about a CDN price war , others say the underlying business  remains strong.
Article printed from Data Center Knowledge: http://www.datacenterknowledge.com
URL to article: http://www.datacenterknowledge.com/archives/2007/08/22/data-center-stocks-still-beating-dow/
URLs in this post:
 best performing sectors: http://www.datacenterknowledge.com/archives/2007/Jan/02/2006_huge_year_for_data_center_stocks.html
 first half of 2007: http://www.datacenterknowledge.com/archives/2007/Jul/02/strong_first_half_for_data_center_stocks.html
 took a beating : http://www.datacenterknowledge.com/archives/2007/Jul/26/sharp_selloff_for_akamai_shares.html
 IPO sensation: http://www.datacenterknowledge.com/archives/2007/Jun/10/limelight_return_of_the_first-day_ipo_pop.html
 lowering its revenue guidance: http://www.datacenterknowledge.com/archives/2007/Aug/09/limelight_shares_plunge_on_revenue_issues.html
 CDN price war: http://www.datacenterknowledge.com/archives/2007/Aug/07/concern_about_prospect_of_cdn_price_wars.html
 underlying business: http://www.datacenterknowledge.com/archives/2007/Jul/30/rayburn_cdn_market_remains_strong.html
 Rich Miller: http://www.datacenterknowledge.com/archives/author/richm/
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