Shares of

Brocade

(BRCD)

were moving up sharply Wednesday morning, after an upgrade by Goldman Sachs and a hint that the company may have won a major contract with

Dell

(DELL) - Get Report

.

In recent trading, the storage networking vendor was up 65 cents, or 9.6%, to $7.38 a share on strong volume.

Goldman analyst Brenden Smith, who recently succeeded Laura Conigliaro, raised the company's rating to outperform from in-line, even though shares have run up by about 33% since early October. "After digesting recent gains, we believe the stock could eventually break through the $9 level in the next six months," Smith wrote in a note to clients.

He also said Brocade may have won "a single-source opportunity from Dell for a low-end switch that will sell as part of Dell's standard storage area networking bundle around mid-2004.

"Although it has not been widely publicized, Dell has had an RFP out since the early summer for both a low-cost switch and HBA

host bus adaptor to include in a new SAN

storage area network bundle using a lower-end version of the Dell manufactured Clarion from EMC." Smith added. Dell has not yet announced the winner of the contract.

Goldman Sachs does not have an investment banking relationship with Brocade.