Data center-oriented stocks were among the best performers of 2010 as companies updated and expanded their internal data centers and leaned increasing on third party providers for hosting and cloud computing.

Overall, the technology sector was a good place to invest in 2010, with the NASDAQ index up 17% on the year. That compared to the Dow, which also managed a relatively strong 11% gain in 2010.

According to an analysis compiled by investing web site NASD100, the technology company with the best performance on the year was RADCOM, a provider of network monitoring systems for large telecommunications companies. RADCOM, which has its international headquarters in Tel Aviv, and a U.S. office in Paramus, N.J., rewarded investors with a 560% gain on the year.

While not in that stunning territory, many investors in the data center sector were richly rewarded in 2010.

Terremark Worldwide of Miami, Fla., led the way with an 89% gain. Terremark expanded aggressively during the year, announcing in April that it would begin construction on its third data center in the Capital Region and launched international cloud initiatives.

NaviSite and Savvis, which both fit into the infrastructure-as-a-service category, were strong performers, with 85% and 82% gains, respectively., probably the most recognized name in the application-on-demand market, also recorded a 79% gain.

Rackspace Hosting, a co-location specialist that also made an aggressive foray into cloud computing this year, recorded a 51% return on the year.

While there was broad strength in the data center-oriented category, not all companies were winners. Co-location specialist Equinix, was punished by investors in October when it lowered expectations for the year, and saw its shares close the year down 23%. Data center real estate investment trusts CoreSite Realty and Digital Realty Trust were caught in the fallout. CoreSite shares closed the year down 15% while Digital Realty pared earlier gains to finish the year up just 3%.

Here’s how some other major players fared in 2010:

Selected Winners:

  • EMC, +31.1% on the year
  • IBM, +12.1%
  • SAP, + 8.1%
  • Intel, +3.1%

Selected Losers:

  • Dell, -5.6%
  • Microsoft, -8.4%
  • Cisco, -15.5%
  • Hewlett-Packard, -18.3%




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