Tech Winners & Losers: VMware

Tech stocks were back in the red on Wednesday along with the rest of the major market indices as fears within the financial sector continued to shake investors.

The Nasdaq slid 71 points -- or 3.2% -- to 2137 in afternoon trading.

Shares of VMware(VMW Quote) plunged 15.8% to $26.92 as analysts raised doubts over the company's ability to effectively compete against Microsoft(MSFT Quote).

Jeffries slashed VMware's price target by $10 to $30 but maintained a hold rating. The firm pointed to recent shake-ups in management as cause for concern.

The stock drop comes as VMware tries to dazzle users at its annual conference in Las Vegas this week.

Shares of SanDisk(SNDK Quote) were soaring 40.3% to $21.12 after its board rejected Samsung's offer to purchase the company for $26 a share.

Samsung made its bid public on Wednesday, expressing deep disappointment at SanDisk as it "continues to cling to unrealistic expectations on both its standalone market value and an appropriate merger price."

SanDisk called Samsung's offer inadequate, saying it's not in the best interests of shareholders.

Nortel(NT Quote) shares plunged 44.2% to $2.96 after it cut its revenue outlook for the year. The company now expects revenue to fall 2% to 4% instead of its previous guidance for a low single-digit gain. It also lowered its gross margin estimate to 42% from 43%.

Nortel says that it is facing additional pressure on revenue as a result of foreign currency exchange and delivery delays of some of its products in the third and fourth quarter.