Talkin’ Cloud Stock Index Rises Another 4.1 Percent
The good news: The Talkin’ Cloud Stock Index gained another 4.14% for the week ending February 11, 2011, bringing us to an overall 15.99% rise from the start of 2011 — an incredibly strong start to the year. But the higher cloud computing stocks climb, the more nervous we get for the inevitable dip. After all, the cloud computing industry has more than a few things in common with a roller coaster.
And speaking of roller coasters, here’s the standard (financial) safety warning before we go through the dips and turns the cloud winners and losers took this week: Talkin’ Cloud doesn’t offer specific financial advice, and whether you buy, sell, or hold is up to you and you alone. The Talkin’ Cloud Stock Index is just to measure real-world performance against cloud hype.
The Big Weekly Winners
The biggest winner of the week with a 14.48% rise to $35.82 per share was SuccessFactors, Inc. (SFSF), which provides cloud-based business execution software to enterprises of all sizes. Despite posting a loss for Q4 2010, SuccessFactors’ deal with cloud service provider and reseller Capgemini Consulting, coupled with the company’s public confidence that they’ll at least break even in 2011, propelled them into the winner’s circle in time for the market’s close on Friday.
In the number two slot is Rackspace Hosting, Inc. (RAX), continuing it’s steady rise from last week with an 11.03% boost to $40.07/share. Paving the way to Rackspace’s stock success this past week was the news that the company experienced Q4 2010 net revenue of $214.7 million, a 26.7% gain from the same time in 2009. And Rackspace’s net income of $13.5 million in the fourth quarter was a 49.9% year-over-year boost. It’s easy to see how investors would find those figures attractive.
Managed cloud infrastructure service provider Savvis (SVVS) slides into third with a 10.13% weekly gain to $35.23 per share. Like Rackspace and SuccessFactors, the company’s gain seems to be driven by an earnings statement. Savvis reports its own year-over-year Q4 revenues went from $219.8 million in 2009 to $252.7 million.
And The Losers
Of the 20 companies in our index, six saw their shares decline for the week ending Feb. 11. Only one took a hit of larger than 1.5%, so Talkin’ Cloud remains unconcerned. That said, Vocus (VOCS) continues a personal roller coaster as better-than-expected quarterly earnings statement couldn’t stop them from falling 2.72% to $26.48/share.
As we said last week: It’s too soon to throw a party in honor of the cloud’s good fortune. But investor confidence in the cloud is clearly higher than ever. Just remember — most roller coasters end on a drop. Come back the week ending February 18 for another update on the Talkin’ Cloud Stock Index.