Just like
Nvidia (NVDA) last week [
Nvidia - Ouch],
VMWare (VMW) shows us yet again that the current Wall Street thesis that you can hide in technology because it is safe is yet another brilliant strategy. Down a quarter of it's value this AM on a warning. I know, I know - it's all due to
Microsoft (MSFT)... just like Nvidia was all due to ATI. If you take away those outliers technology is safe overall since there is no exposure to oil - yep, that's the ticket, right
Nokia (NOK)? (down 37% YTD) Somehow consumers and producers cutting back in everything = won't hurt technology. Nope. Sounds like a lot of good horse sense from this set of eyes.
- Shares of VMware Inc. plunged 26 percent in Tuesday morning trading, after the virtual software maker warned its fiscal 2008 revenue would fall short of prior estimates, and said it replaced President and Chief Executive Diane Greene with former Microsoft executive Paul Maritz, effective immediately.
- The company said fiscal 2008 revenue will fall "modestly" below prior guidance for 50 percent growth year-over year. In fiscal 2007, VMware reported sales of $1.33 billion.
- On average, analysts surveyed by Thomson Financial expect total revenue of $2 billion for the full year.
Not long this safe stock in a very safe sector totally oblivious to the economic cycle
1 comments:
I never liked VMware as a stock mainly because they have a lot of competition from a few different areas. First there are free solutions you can get. They may not be as powerful as the main VMware one, but many people make due with something that's free (and tech people are used to doing this as a part of their job). Second is that computers are getting cheaper and cheaper. Throwing out more computing instances is nice, but when I can get a crap load of commodity machines on the cheap, how much do I want to pay for that VM software? You also have MS pushing their own VM solution that's going to end up being a part of windows. Again, it may not have all the features that VMW has, but when it's already part of your OS why not just use it and make due?
I think VMware is a good idea and good product, it just didn't deserve the world changing valuations it once received.
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