Why a Cloud Correction Is Coming

Fri, 08/12/2011 - 13:12 EDT - Seeking Alpha

By Dana Blankenhorn: While the rest of the market was going crazy over the last week, companies most identified with the cloud barely budged. It's a bit counter-intuitive. Boom sectors are supposed to be hit hard in a downturn. The rule of thumb is you go inside during the hailstorm. One reason is these stocks got in their correction early. Take the analysis back a month, rather than five days and the performance of these cloud stocks do indeed trail that of the Dow Jones average. The Dow is down 11% since mid-July. But VMWare (VMW) is down 11.63% during that time, Amazon.com (AMZN) is down about 14.2%, Rackspace (RAX) is off 14.68%, and Red Hat (RHT) a big 16,85%. The technicians, by the way, see Red Hat's resistance level as up only $2.33 from here, so much of that loss won't be retraced soon. What does all this teach us? Speculative issuesComplete Story »

Original article
Login or register to post comments

VMware Problems Are VMware Problems
By Dana Blankenhorn: VMware (VMW) managed to tank the whole cloud sector yesterday, with weak guidance sending the stock plummeting over $21/share in a single session.
Solar ETFs Yes, Cloud ETF No
Dana Blankenhorn submits: The purpose of an ETF is to spread risk and deliver a “pure play” in a sector. The launch of an ETF for cloud computing, dubbed SKYY, is causing a lot of excitement. It launches July 6. Too much excitement, in my opinion.
Cloud Software Or Cloud Services? Red Hat Or Rackspace?
By Dana Blankenhorn: There are two growth vectors for the cloud, software and services. If you are looking for proxies on both, they are Rackspace (RAX) for services and Red Hat (RHT) for software.
Red Hat, Rackspace Try To Be More Open In The Cloud
By Dana Blankenhorn: The cloud computing market is caught between its head and its heart. The head is closed. The head buys VMWare's (VMW) vSphere hypervisor, which is proprietary. The head buys Amazon (AMZN) Web Services' (AWS) public cloud, also proprietary (but with an open API). The heart, however, is open.
Red Hat Suddenly Has Cloud Momentum
By Dana Blankenhorn: When analyzing stocks in a new area like cloud computing, it's important to compare apples with apples, and not pomegranates
Red Hat Will Thrive Over The Next Decade
By Investors Mosaic:Red Hat (RHT) is one of the most unique and defensive business models in technology. If you don't know Red Hat, they are the leader in providing open source software technologies to enterprise customers. They offer an enterprise operating system platform - Red Hat Enterprise Linux, JBoss Middleware, virtualization, cloud and storage offerings.
VMware Suffering Cloud Squeeze
By Dana Blankenhorn: Tomorrow will be the most important day in the history of VMware (VMW).Top managers will be talking up the company's strategy to institutional investors who now have a right to feel nervous.
Red Hat Discovers Dell An Ally Against VMWare Cloud Foundry
By Dana Blankenhorn: The most interesting open source battle going on right now is between Red Hat's (RHT) OpenShift and VMWare's (VMW) Cloud Foundry
What I Learned At Red Hat
By Dana Blankenhorn: You can learn a lot at a trade show, even a corporate one. And not all of it is positive for the company in question.Take this week's Red Hat (RHT) Summit, now finishing up in Boston. Full disclosure, I like the people. CEO Jim Whitehurst is an alma mater of my old school, although he went through a decade after I left. I believe in their mission of open source.
Red Hat Shows What Real Cloud Looks Like
By Dana Blankenhorn: While Oracle (ORCL) is rolling out what I've already called its phony cloud Red Hat (RHT) is quietly solving real cloud problems with a new management platform

Main menu

Secondary menu

Why a Cloud Correction Is Coming

Related

Latest

User login

Our Blog

Markets Map

Follow Us

Secondary menu