VMWare (VMW) looked good out of the box. After its IPO, shares went from under $52 to over $125. But, as the stock hit $84.60 today, one-third of the peak value of the company was gone. And, it took less than ten trading days to kill almost $15 billion in market cap.
What happened? The drop in big tech Nasdaq tech stocks has not helped. When it moved over $125, it has a PE of over 200.
VMWare is growing fast, but maybe not fast enough to support a company value of well over $40 billion. In the last quarter, revenue was only $357 million, which was up 88% over the same quarter last year. EPS tripled to $.18.
Buried in the company’s "risk factors" is the note that Microsoft (MSFT) is competing with VMW in the entry level portion of the virtualization business and that Redmond is planning to go after the larger enterprise end of the industry as well.
Microsoft may not do everything right, but it is willing to spend billions of dollars in markets that are important to it. Even VMWare does not have that kind of money.
Douglas A. McIntyre
The Average American Is Losing Momentum On Their Savings Every Day (Sponsor)
If you’re like many Americans and keep your money ‘safe’ in a checking or savings account, think again. The average yield on a savings account is a paltry .4%1 today. Checking accounts are even worse.
But there is good news. To win qualified customers, some accounts are paying more than 7x the national average. That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn a $200 bonus and up to 7X the national average with qualifying deposits. Terms apply. Member, FDIC.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.