Buy NetApp and EMC, Sell Juniper

NEW YORK (TheStreet) -- In the ongoing battle for "big data" supremacy, it seems that the market is torn between two of the names that have emerged as leaders in the storage business.

On the one hand there is EMC (EMC), and on the other there is NetApp (NTAP). The question is which one has the better chance of producing solid market-beating performances. Why not both?

For as much as I love EMC as a company and stock, each day that goes by, I grow more enamored with NetApp for the same reasons.

Still, it matters very little what I think as the market continues to favor EMC.

At current prices, though, NetApp is a bargain.

NetApp will report its earnings for its fiscal first quarter on Wednesday, and I would buy the stock ahead of the report. I might be in the minority in that sentiment. The stock has been trading lower recently in part because of a downgrade to hold by Cantor, which cited prolonged weakness in enterprise spending. For the quarter, analysts are expecting the company to report EPS of 38 cents on revenue of $1.46 billion.

I think the company should easily beat its numbers as it has done over the past several quarters. The key question will be its guidance, because several of its rivals have offered weak forecasts.

The fact of the matter is, data storage is a critical IT priority for many companies and should keep NetApp in excellent shape for the foreseeable future. Although EMC might now be the safer play, NetApp is a bit more interesting for risk-hungry investors as it shows considerably more growth potential.

What's more, NetApp has more than demonstrated that it is a power in its own right and has distinguished itself not only from rivals ECM, but also from traditional powers such as Dell (DELL) and IBM (IBM), from whom it has methodically captured market share. It has done this consistently by establishing an approach to storage architecture that appeals to a broad range of customers.

This doesn't erase the fact that many investors are still unsure of what exactly the cloud is. As the fight continues to unfold, the challenge for investors appears to be distinguishing between software cloud companies such as database giant Oracle (ORCL) and open-source leader Red Hat (RHT). Then there are names that specializes in virtualization such as VMware (VMW) and Citrix (CTXS).

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