Shares of server technology vendor Fusion-IO (FIO) are up 58 cents, or 2.7%, at $21.76 as the�Open Compute Project Summit gets underway in Santa Clara, California, and announced its latest wares, something it calls “Fusion ioScale.” and the response from the Street seems to be fairly positive so far.
The Benchmark Company’s Gay Mobley, who has a Buy rating on the shares and a $35 price target, this morning writes that “We view the launch of this new product line as a catalyst for Fusion-io’s already-strong sales pipeline.”
“While the low price point for the new product could cap Fusion-io gross margin potential (LT guidance at 56%-58%, but more hyperscale may mean a range toward the lower end of a 54%-60% range), we believe the new hyperscale market focus is very incremental to gross profit dollars.”
And Piper Jaffray’s Andrew Nowinski, who has an Overweight rating on the shares, and a $33 price target, writes “We have never been concerned with the notion that either Facebook or Apple would consider dual-sourcing PCIe flash cards away from Fusion-io and this product launch confirms our belief.”
Nowinski thinks ioScale is indicative the company has room to grow at both Facebook (FB) and Apple (AAPL):
Fusion-io�s launch of the new ioScale product this morning is indicative of the growing opportunity at Facebook and Apple. The product is specifically designed for the scale-out �disposable server� architecture that both strategic customers currently leverage. We have never been concerned with the notion that these customers are considering dual-sourcing, though the concern continues to linger within the investment community.This product launch confirms our belief that Fusion-io�s growth at Facebook and Apple is solely dependent on the growth of each customer. When Facebook or Apple grows, Fusion-io grows.
Today’s Summit is sponsored by a number of companies in addition to Fusion, including server chip startup�Calxeda, RackSpace (RAX), and�Hewlett-Packard�(HPQ).
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