“This is still a psychologically damaged market; take for example, what happened with VMware (NYSE: VMW) after its latest earnings announcement,” notes Toby Smith in ChangeWave Investing.

“VMware recently reported that its fourth-quarter net income more than doubled on an 80% increase in revenue. Despite these excellent results, after-hours selling has plunged the shares lower by 25% to around $61.

“The culprit appears to be analysts’ forecasts for an 82% increase in revenues. The buzz on the Street is that that miss signals stiffer competition in the virtualization space from Microsoft (NASDAQ: MSFT) and Oracle (NASDAQ: ORCL).

“However, during the conference sign VMW management said customers have tried some competitors’ products and told them that they see no reason to switch.

“This sell-off is similar to what recently happened to Apple (NASDAQ: AAPL) — blowout performance followed by a hatchet job on the shares. As with Apple, we see that price drop in VMW as a great opportunity to set up a low cost-basis in the stock.

Continue reading A vote for virtualization: Toby Smith buys VMware (VMW)

Original post by Steven Halpern

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