Cloud Stocks Take A Beating

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Investor disappointment over the latest earnings results at F5 Networks spilled over into shares of other companies whose fortunes are tied to the growth of cloud computing, prompting selloffs in shares of networking and data center stocks.

F5 Networks (FFIV) plunged 21.4 percent to close at $109.15 after the leader in the network optimization sector forecast weak second-quarter revenue in its earnings report late Wednesday. Experiencing collateral damage was Rackspace Hosting (RAX), which saw its shares decline 10.9 percent, sliding $3.65 to close at $29.78.

Other stocks seeing declines in Thursday trading included:

  • Aruba Networks (ARUN), which fell 7.8 percent to $22.41
  • SGI (SGI), which declined 5.9 percent to $10.33
  • Juniper Networks (JNPR), down 5.1 percent to $34.99
  • Terremark Worldwide (TMRK), off 4.2 percent at $13.37
  • Riverbed Technologies (RVBD), down 4.1 percent to $35.44

Many of these companies have seen their shares record buig gains amid investor enthusiasm for cloud computing. Seen in a broader timeline, the losses seem less dramatic. Shares of Rackspace, for example, fell back to levels seen in early December, effectively surrendering six weeks of gains at the tail end of a steady rise from $17 a share last summer.

About the Author

Rich Miller is the founder and editor at large of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.

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2 Comments

  1. Craighton Ellingsworth

    After the acquisitions of Navisite and Terremark in the last few weeks - I'd be interested in your take/re-examination of the market at this point. Given that Time Warner and Verizon both specifically mentioned the cloud offerings of their acquisitions in their announcements of the purchases - do you think we are about to see a run on companies with cloud offerings?