SAN FRANCISCO - VMware ( VMW) shows no signs of letting up.

The stock jumped $9.15, or 8.2%, to $121.24 in afternoon trading on Monday, in the wake of higher expectations for the virtualization software provider.

The median price target on the stock is now $105, according to Thomson Financial. And six out of 10 research notes issued by sell-side analysts since VMware posted an earnings surprise Wednesday put the 12-month target price above $125, with Citigroup analyst Brent Thill going up to $134.

VMware is an investment-banking client of Citigroup.

News on Monday that the Palo Alto, Calif. virtualization software company had landed the U.S. Marines as a client hasn't hurt, either.

The stock has shot up 16% since reporting third-quarter revenue and now trades at 109 times 2008 earnings. The current stock price gives VMware a market cap of $46 billion, putting it in range of eBay's ( EBAY) market cap of $50 billion.

Thill raised his price target from $100, assuming a price-to-earnings-to-growth (PEG) ratio of 1.7 on a 2009 EPS estimate of $1.50. VMware is now expected to earn $1.10 per share in 2008 and $1.53 in 2009, according to Thomson Financial.

When looked at against comparable stocks, whose average PEG multiple is 1.85, "our 1.7x PEG for VMW is roughly in-line, which we feel is justified given the groundbreaking nature of VMware's products," Thill wrote. He noted that Apple ( AAPL) has a PEG of 1.9.