Since its initial public offering at $29 a share on Aug. 14, the software company's stock has jumped to near 92. It has surpassed Adobe Systems (NASDAQ:ADBE)
ADBE, which went public in 1986, on market capitalization and ranks as the No. 4 applications software company, after Microsoft MSFT, Oracle ORCLand SAP SAP.
VMWis by far the leading maker of virtualization software. This product makes servers more efficient, and is becoming a must-have item for big companies. At the company's annual conference in San Francisco last month, almost 11,000 people showed up, a jump of 50% from 2006.
"This company is growing like crazy," said Clay Ryder, an analyst with the Sageza Group.
Some analysts have a 100 or more price target on the stock. One reason is that VMware, which already dominates its field, last month paved the way for even faster growth. It announced that it now will embed its core product on servers before they ship to customers. Major server makers have said they plan to make hardware with VMware software pre-installed.
This adds up to a big challenge for Microsoft, which has low-end virtualization software out there but won't launch a product to challenge VMware's high-end core product until next year.