One Credit Suisse (NYSE:CS) analyst may be single-handedly driving price gains for data storage companies NetApp (NASDAQ:NTAP) and EMC (NYSE:EMC) today, projecting major growth for the sector in the near future. Deepak Sitaraman triggered a flux of activity surrounding the companies this morning when he raised his outlook on both from “Neutral” to “Outperform” setting price targets of $65 NTAP and $34 for EMC.
The analyst wrote, (speaking of NTAP) “While the recent Engenio acquisition has caused angst amongst investors, we believe the deal is an opportunity for NetApp to address high bandwidth workloads outside the scope of the company’s ONTAP OS roadmap, a $5 billion market opportunity, longer term.”
Sitaraman believes that both companies stand in good position to steal market share from data storage and old school tech leaders, IBM (NYSE:IBM), Dell (NASDAQ:DELL), and Hewlett-Packard (NYSE:HPQ), because of a lack of investment in research on part of the firms.
From Barrons, “Sitaraman thinks operating margin can rise in fiscal 2013 to 21.2% of revenue from fiscal 2011′s 20%. The Street, he writes, is presently expecting margin to actually degrade to 18.7%.”
With data officially moving into the cloud, storage providers could stand to gain quite a bit as larger than ever before capacities will be required to fuel the mobile-ready services. Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG), Amazon (NASDAQ:AMZN), and Microsoft (NASDAQ:MSFT) are leading the mainstream tech sector’s move to cloud storage.