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Tech Hitting the M&A Trail

With a market cap of more than $7 billion, however, McAfee would not come cheap, and its valuation is likely to soar in an improving economy. A much more likely target for H-P would be security software maker ArcSight (ARST), according to Daly, who is one of the company's many fans.

"There were rumors that H-P wanted to buy them before their 2008 IPO," he said. "Their stock did nothing until this year, but it's delivering, it's profitable and ArcSight has very strong sales into the Federal Government."

One of TheStreet's breakout stocks, ArcSight has been tipped as a challenger to tech security giants Symantec (SYMC) and McAfee.

The company has more than tripled in value during the last 12 months, and is currently trading around $23.21.

With a market cap of just over $770 million, Daly says that ArcSight would be easy for H-P to swallow. "I am not suggesting that anything is in play, but does the math make sense? Yes," he said. "Something like ArcSight is digestible and it delivers quality contracts."

ArcSight has not yet responded to a request for comment on this story. H-P declined to comment.

It is not just security, however, where there is plenty of acquisition talk, particularly after Cisco's purchase of video conferencing specialist Tandberg.

"There has been speculation about whether Polycom (PLCM) could be in play as a result of Cisco's acquisition of Tandberg," said Ron Gruia, lead telecom analyst at Frost & Sullivan. "There's a rumor that Avaya may make a move for Polycom, but they are in a hold pattern until the DoJ approves their Nortel (NT) acquisition."

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