Posted by: Mark Fontecchio
Data Center, data center stocks
In October, Jim Cramer, the host of “Mad Money” on CNBC, predicted that data center stocks would tumble, in part because the Intel Nehalem chip would do so much more inside a server.
Rich Miller at Data Center Knowledge took issue with it and called Cramer “dumber than a bag of hammers” when it came to data centers. As it turns out, Miller was right. He’s been tracking data center stocks since then and found that many actually had double-digit increases — Internap, Akamai, Equinix, Switch and Data, and Rackspace. Only one, Savvis, had a double-digit decrease since then.
Miller’s take on it all:
To be sure, data center stocks won’t go higher forever, particularly after the stellar runup for the sector during 2009. But if you’re interested in understanding the industry and its future, take the time to understand the factors that are driving the demand for data center space, and how technology is impacting these facilities and their design. As we noted in our October post, Nehalem processors will allow companies to do more with less, but they’re not going to empty out all the data centers.
In the comments, someone wrote that “(w)hile this particular rant of his is about your specific industry, his predictions in general are around 48% good. (That % came from a study someone did over the past 3-5 years, if memory serves.) Point being, don’t get all bent out of shape about it.”
I found that kind of funny, because at that rate, a monkey would be a better predictor than Jim Cramer. Check it out: Take a monkey and put two pieces of paper in front of it, one that says “buy” and one that says “sell,” and follow the advice on whichever piece of paper the monkey chooses. Over the long run, you’ll have a success rate of 50%, better than Jim Cramer. You’re welcome!