At Cisco, Online Video Boom Helping Router Sales

Goldman Sachs has turned cautious on the communications equipment sector.

Goldman’s Simona Jankowski is assuming coverage of some companies in the group, and in the process lowering the firm’s view of the sector to Neutral from Attractive. (Jankowski takes over from Brantley Thompson, who is going to the buy side.) She picks up coverage of Cisco (CSCO) with a Buy rating, and adds the stock to the firm’s Conviction List; she also picks up Juniper Network (JNPR), and cut her rating to Neutral from Buy. She’ll also be covering Motorola (which is currently rated) and Buy-rated Qualcomm (QCOM) and Research in Motion (RIMM).

We routinely look over major changes in short interest from period to period. While the more frequent twice-monthly reporting is conducted by exchanges, it sometimes gives a little insight into the psyche of traders and trends. The most important issue to look at is in the larger and more active names that have large positions that grew rapidly in percentage terms.

The movement toward blade servers in the enterprise data center has been growing steadily for some time, backed by manufacturers like IBM and HP. But expect to soon see networking giant Cisco Systems enter this market as well, setting themselves up for a tense battle with blade server manufacturers for control of the enterprise data center.