Cloud Stocks Keep Flying High

Stocks in a handful of cloud computing-focused companies, selected here for tracking a little more than a month ago, are climbing right into the stratosphere.

While the hype around cloud-focused technology and IT companies has been increasing steadily over the past 18 months, one way to track whether the hype is leading to any real action with money men and women is to follow how some key cloud stocks are doing on Wall Street.

On Nov. 13, we picked out a market basket of cloud stocks: Google, Rackspace, Terremark, Qwest, Equinix and salesforce.com -- companies with a varied but aggressive approach to cloud computing. Investing a theoretical $1,000 (give or take) in each of them, and seeing if they gained much value, would give us an idea over the course of a month if investors on a broad basis were putting their money where the hype was. Little more than a month later: they are. They really are.

Overall, the cloud portfolio grew by almost 11 percent in little over a month. By comparison, the stocks on the Dow Jones Industrial Average grew by 2.1 percent. These cloud stocks, as a whole, are outpacing the broader market by 5-to-1.

Leading the way is Rackspace, San Antonio, Texas, the cloud and hosting provider that recently has gotten more aggressive in the Storage-as-a-Service and hosted e-mail segments. Since Nov. 13, Rackspace shares have increased by more than 25 percent, to $21.64. Qwest and Equinix are both up a fraction more than 12 percent, each, for that time span. Shares of Google, which briefly hit the $600 mark on Wednesday, are up 5.27 percent. Terremark, which has never reported a profit, is up almost 6.5 percent since Nov. 13 and salesforce.com has grown by more than 4.5 percent.

All of these stocks are greatly outpacing the market over the past month. It seems as investors look to take their cash off the sidelines following the economic meltdown, they are looking for growth stocks and they believe they've found them in cloud computing companies.