Shebly Seyrafi, an analyst at A.G. Edwards, says the largest factor is that McData's Intrepid 6140 and 6064 directors are easily beating the Brocade SilkWorm 12000 in the market. "Brocade has simply lost some of its luster," he says. Seyrafi owns shares of McData, and A.G. Edwards makes a market in the stock.
Seyrafi adds that McData appears to have had strong sales throughout the whole fourth quarter, not just at the end of December. "It wasn't just some year-end deals that they closed at the last minute," he says.
Shares of McData were up 13.3 percent in mid-morning trading, at $9.52. Its upward guidance also boosted other storage networking stocks, including:
But one Wall Street analyst, who requested anonymity, cautioned that McData could be seeing just a one-quarter pop rather than any long-term momentum. "It's a little concerning to see a company beat numbers by this much. The question is, in Q1 and Q2, will there be some letdown?"
Moreover, Cisco Systems Inc.'s (Nasdaq: CSCO) push into the FC switch market is dangling over McData (see The Cisco Hammer).
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