VMware, Inc. (NYSE:VMW) has had quite a run in 2017. In the past 12 months, VMW stock is up nearly 50%. Year-to-date, it’s up nearly 40%. And in just the past 3 months, it VMW stock has made a near-20% move.

But for the past week or so, VMware stock has just been coasting at its current levels.

Usually, when this consolidation occurs, things can go one of two ways: either the stock sells off, having gotten ahead of itself and the market is catching up to that reality; or, the stock continues its climb.

In the case of VMW stock, the latter scenario is the most likely.

VMware is the leading supplier of cloud services software. Without getting too geeky, the company provides virtualization software as well as other systems that allow cloud services companies and data farms to maximize their server capacity and better manage public and private clouds.

Using the old gold miners and pick and shovel analogy — the money isn’t in the gold, it’s in the stores that sell the picks and shovels — VMW is most certainly a “pick and shovel” firm. The biggest out there at the moment.

And the most compelling aspect of its business right now is that it’s building a broad and deep moat around its dominance by partnering on both the hardware and software sides with the biggest names in the business.

On the hardware side, it has partnered with International Business Machines Corp. (NYSE:IBM), Cisco Systems, Inc. (NASDAQ:CSCO) and Intel Corporation (NASDAQ:INTC), to drop a few gigantic names.

On the software side, VMW is a key partner of this sector’s crème de la crème — Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) and Microsoft Corporation (NASDAQ:MSFT).

Amazon is the biggest player in the cloud space by a large margin and its Amazon Web Services (AWS) division, which runs its cloud services, is the cash cow that drives most of the other divisions within AMZN. Just that partnership alone is a worthy prize. Then you have MSFT. Its Azure cloud is the fastest growing big cloud player out there. And of course, GOOGL maintains one of the biggest internal clouds in the business.

With VMware software built — and sometimes designed — into their systems, there is little doubt that VMW stock has plenty of growth ahead, even if it just works with its current top clients.

And its most recent Q2 numbers, released in late August bear this out. Revenue was up 12% for the quarter compared to the same quarter last year. Licensing revenue was up nearly 14%. Net income was up nearly 30%. It plans to buy back $1.2 billion in stock this fiscal year and another $1 billion by the end of August 2018.

All these signs point to this being a good opportunity to get in before VMW stock takes off again.

— Louis Navellier

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Source: Investor Place