Internap was the best performing data center stock in the first three months of 2013. Shares of the the Atlanta-based colocation provider soared 34.9 percent on the quarter, as strong earnings made it the standout performer in a decidedly mixed quarter for the data center sector.
Publicly-held companies on our Data Center Investor list were nearly evenly split, with six recording gains while five lost ground – an underwhelming performance in light of the strength in the broader market. The Dow Jones Industrial Average had its best quarter in 15 years, gaining 11.25 percent, while the S&P500 index rose 10.1 percent to end the quarter at record levels.
Only three companies beat the broader averages, including Internap (INAP), CoreSite Realty (COR) and CyrusOne (CONE), which received strong investor interest after its IPO on Jan. 18.
Here’s a look at the first quarter performance chart for our Data Center Investor list of stocks.
Shares of Internap surged after the company recorded a strong quarter, “indicating it is striking the right chords with its diverse portfolio of colocation, managed services and cloud,” as DCK’s Jason Verge noted in a recent profile. In recent years the company has focused on its colocation business, expanding its margins by concentrating on company-operated colo space.
At the other end of the spectrum is managed hosting and cloud computing specialist Rackspace Hosting. Shares of Rackspace (RAX) fell sharply after the company’s earnings report raised concerns that the rate of adoption for cloud computing services may be moderating. The slide reflects Wall Street’s high expectations for Rackspace, which saw its shares rise 72 percent in 2012 amid investor enthusiasm for cloud computing.