Container Prospects Boost Rackable

Shares of Rackable (RACK) are stronger today after an upgrade from brokerage Canaccord Adams, which cited growth prospects for the company's ICE Cube line of containerized data centers. Rackable shares are 61 cents higher to $10.30 a share in afternoon trading, an improvement of 6.4 percent.

"We believe Rackable's container business will become a key growth driver for the company," Canaccord Adams analysts wrote in upgrading the stock from Hold to Buy. "We believe that adoption of modular data centers by Internet-based companies such as Microsoft and Yahoo will provide Rackable a differentiated product, and a path to top-line growth."

In January executives at Rackable predicted that 2008 will be a "breakthrough year for containerized data centers" and said that the company will deploy at least 20 of its ICE Cube portables this year, and perhaps as many as 50.

Yahoo (YHOO) has deployed one of Rackable's ICE Cube units to support the M45 Supercomputing Project with Carnegie Mellon University. Earlier this month Microsoft (MSFT) said it will populate one floor of its $500 million facility with as many as 220 shipping containers filled with servers.