Investors should buy VMware shares on the solid growth prospects for its cloud infrastructure software in the coming year, according to Citi Research, which raised its rating on the company to buy from neutral.
VMware reported better-than-expected third-quarter financial results Wednesday.
"Strong Q3 trends look more sustainable. ... Sustainability of higher growth motivates our positive outlook," analyst Walter Pritchard wrote in a note to clients Thursday.
"We believe shares are poised for multiple expansion as growth stabilizes at this accelerated level and investors appreciate VMW's position has improved vis-a-vis public cloud."