Why Fusion-io Shares Soared

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of data storage specialist Fusion-io (NYS: FIO) climbed 11% today on a report that the company is working on an original equipment manufacturing deal with giant Cisco Systems (NAS: CSCO) .

So what: If the deal gets done, Wall Street analyst Piper Jaffray noted that Cisco could quickly represent 10% of Fusion-io's business over the next three to four quarters. Additionally, Piper estimates that Fusion-io's Facebook revenue could double to about $200 million in 2012, giving investors plenty of reason to increase their own growth estimates.


Now what: Don't let today's pop keep you from looking into the stock. Piper maintained its outperform rating with a price target of $38, representing about 40% worth of upside left to the current price. When you couple the tailwinds working in Fusion-io's favor with the fact the stock is still well off its November highs of $41.70, Piper's target seems like a reasonable bet.

Interested in more info onFusion-io?Add it to your watchlist.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Cisco. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners