Breakout Quarter for Cloud Computing Stocks

Breakout Quarter for Cloud Computing Stocks

Some time back I had discussed the possibility of cloud computing stocks being valued more than they are worth (See: Are Cloud Computing Stocks Overvalued?). While, personally speaking, I believe that cloud computing stocks have more solidity than their vaporous counterparts during the Dotcom Bubble, I did recommend caution.

Perhaps this quarter will be a good time to examine the fundamentals of cloud computing stocks, considering they have had the best time in the markets in recent times. A lot of the exuberance was fueled by consolidation in the space, with some bigger companies making a play for the smaller entities. This includes Verizon’s offer to buy Terremark and Time Warner Cable’s offer for NaviSite, with both the target companies’ stocks rising 50% after the announcements.

Besides cloud computing service providers, companies that make hardware for the industry, have also seen an upsurge in their share prices. The biggest beneficiary has been SGI (formerly Silicon Graphics), with its stock rising 137% last quarter, most of it in February after the company reported stronger-than-expected earnings and a possible move into profitability in 2011. SGI, as its website says, “markets and sells a broad line of low-cost, mid-range and high-end scale-out and scale-up servers and data storage solutions as well as differentiating software.”

Other than Massachusetts-based Akamai Technologies, almost all cloud computing stocks had a favorable quarter. Missouri-based Savvis (formerly Savvis Communications Corporation) experienced a 45.3% increase in stock price between 31 December 2010 and 31 March 2011, followed by Rackspace Hosting (36.4%) and Limelight Networks (23.2%).


Returns in the cloud were considerably higher than those in the market indices. The Dow Jones Industrial Average was up 6.7%, the S&P 500 rose 5.6% and the NASDAQ Composite Index was ahead 4.7%. These are much lower than the returns delivered by two of the lesser companies on the list, Equinix and Internap, who have returned 12% and 8% respectively. With such exponential rise of stock prices in this space, cloud computing stocks do merit a closer look.

By Sourya Biswas

Sorry, comments are closed for this post.

The Cloud Is Not Enough! Why Businesses Need Hybrid Solutions

The Cloud Is Not Enough! Why Businesses Need Hybrid Solutions

Why Businesses Need Hybrid Solutions Running a cloud server is no longer the novel trend it once was. Now, the cloud is a necessary data tier that allows employees to access vital company data and maintain productivity from anywhere in the world. But it isn’t a perfect system — security and performance issues can quickly…

Driving Success: 6 Key Metrics For Every Recurring Revenue Business

Driving Success: 6 Key Metrics For Every Recurring Revenue Business

Recurring Revenue Business Metrics Recurring revenue is the secret sauce behind the explosive growth of powerhouses like Netflix and Uber. Unsurprisingly, recurring revenue is also quickly gaining ground in more traditional industries like healthcare and the automotive business. In fact, nearly half of U.S. businesses have adopted or are planning to adopt a recurring revenue model,…

Bimodal IT Is Not The Death of Traditional IT

Bimodal IT Is Not The Death of Traditional IT

Not The Death of Traditional IT If you are a CIO, no doubt you are getting pressure from your line of business managers to provide a more agile IT environment so they can take advantage of faster, easier to use cloud applications. If you’re not providing those services, they are probably using them anyway and…

Principles For Data Protection In The Cloud In 2016

Principles For Data Protection In The Cloud In 2016

Data Protection In The Cloud 2015 ushered in the start of a data economy. As organizations amass more detailed consumer profiles they have begun realizing that data could equal or surpass the value of the products and services they sell, especially in the Internet of Things era with its constant and very personal streams of…

Cloud Service Provider Selection Considerations

Cloud Service Provider Selection Considerations

Why Cloud Brokers Make Sense Different workloads perform differently on different cloud service providers. Enough so that it is prudent in planning to consider the optimal configuration and the optimal CSP for your solution. Consider this old word problem from years ago. One person can carry two buckets of water. It takes 5 minutes to…

IoT Rapid Expansion Throughout The World

IoT Rapid Expansion Throughout The World

IoT Rapid Expansion Cyber Physical Systems (CPS) are a nomenclature used to define the world beyond IoT devices. CPS includes the robotic and automation systems that interact with the IoT devices. Based on that changing landscape I have come to realize that CPS and by default IoT devices actually have three distinct concerns. The three…

Vendors To Enter The Cyber Security Game

Vendors To Enter The Cyber Security Game

IT Regulatory Compliance as the Next Big Focus for Cloud Vendors Back in October 2014, Defense Information Systems Agency (DISA) submitted a public request for information, calling for the assessment of the marketplace’s ability to “provide cloud ecosystems and services in two integration models that place vendor cloud services on DoD networks for use by…

CloudTweaks is recognized as one of the leading influencers in cloud computing, infosec, big data and the internet of things (IoT) information. Our goal is to continue to build our growing information portal by providing the best in-depth articles, interviews, event listings, whitepapers, infographics and much more.

Advertising