SGI, NaviSite Lead First Quarter Stock Winners
April 1st, 2010 By: Rich Miller
The first quarter of 2010 was a Cinderella quarter for struggling stocks in the data center sector, with big gains for companies whose shares have struggled. The biggest winner was server vendor SGI, which saw its shares advance 52 percent in the first three months of the year as its 2009 acquisition of high performance computing specialist Silicon Graphics continued to pay dividends. In recent weeks the company, previously known as Rackable Systems, has introduced a cloud computing platform for HPC projects and announced performance records for its Altix blade cluster.
SGI led a group of data center stocks that beat the broader market averages with double-digit gains. These included managed hosting provider NaviSite (NAVI), virtualization market leader VMware (VMW), content delivery Akamai (AKAM), data center REIT DuPont Fabros (DFT), colocation provider Internap (INAP) and managed hoster Savvis (SVVS).
Here’s a look at the winners and loser in the data center industry in the first quarter of 2010.
By comparison, the Dow Jones Industrial Average gained 4.1 percent over the first three months of the year, while the S&P added 4.9 percent for the quarter and the tech-centric NASDAQ had the strongest quarterly showing, up 5.7 percent.
Not all data center stocks had gains. Equinix (EQIX) and Switch and Data (SDXC) lost ground as the companies sought to complete a regulatory review and close their merger deal, while shares of Rackspace Hosting (RAX) retreated after soaring by 287 percent in 2009.
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Craighton EllingsworthPosted April 1st, 2010
I think VMWare and Akamai need to come out of this list – and have needed to come out of this list for a while. They are not Data Center providers – they are a different part of the industry, and they confuse the information this story is trying to get across. VMWare belongs iwith software providers, Akamai in content distributers – don’t muddy the Data Center industry waters with this slightly relevant but still off topic information.
I’m interested in feedback from other readers about the data center stocks we’re tracking. I’ll admit to struggling with the issue of defining a “data center stock.” Should this be a benchmark of industry providers? Or a performance guide for investors seeking shares linked closely to the fortunes of the data center sector?