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VMware Ready to Spike

The virtualization-software maker should rise on next week's VMWorld conference.

SAN FRANCISCO -- Because

VMware

(VMW) - Get Report

only has to bat an eyelash at investors

for the stock to jump, look for a roller-coaster-like ascent Monday as the annual VMWorld conference hoopla begins.

Shares were up $1.28, or 1.8%, to $71.07 midday. Its first trading day aside, when VMware

rose as much as 90% above its offer price of $29, the stock has proved to be volatile in its first month.

It jumped 15% in a single day a week after its August debut, and shares closed up $5.58, or 8.7%, Thursday, giving the ticker a forward P/E of 77.

The company is sure to use the conference, which begins Sept. 11, as a platform for product-line enhancements. But VMware's competitors, such as

Microsoft

(MSFT) - Get Report

, will also be on hand finding ways to ride the debutante's virtualization train.

Microsoft has some virtualization capability now, but is not expected to ship a key software component until the second half of 2008.

VMware -- a developer of software that enables corporations to make dramatically more efficient use of servers while cutting energy consumption and providing disaster-recovery ability -- went public Aug. 13, in the most ballyhooed IPO since

Google's

(GOOG) - Get Report

TST Recommends

in 2004.

Throngs are expected to turn out for an opening keynote by company CEO Diane Greene and representatives of major VMware partners. Patrick Gelsinger, general manager of

Intel's

(INTC) - Get Report

Digital Enterprise Group will focus on platform advances in virtualization.

Then

Advanced Micro Devices

(AMD) - Get Report

CEO Hector Ruiz will put virtualization into perspective as one of the most influential innovations of the era.

On Sept. 12,

Cisco

(CSCO) - Get Report

CEO John Chambers will draw the link between virtualization and Web trends.

Intel and Cisco

recently took stakes in the virtualization leader ranging from 1.6% to 2.5% of the company.

On a 46% top-line growth curve, the company is expected to bring in close to $1.3 billion this year, and $1.9 billion in 2008, according to Thomson Financial.

With VMW's underwriters barred from providing estimates on the stock for a period following the public offering, half a dozen sell-side analysts have come up with an earnings estimate, excluding items, of 62 cents a share for fiscal 2007, and 91 cents for 2008.