Shares of VMware (VMW 2.59%) were skyrocketing this morning after The Wall Street Journal published a report saying that the semiconductor company Broadcom (AVGO 2.56%) is in "advanced talks" to buy the hybrid cloud computing company.
VMware's stock was up by 19.4% as of 1:41 p.m. ET. Meanwhile, Broadcom's stock was down 4.3% on the news.
The Wall Street Journal said that the acquisition would be a cash-and-stock deal that could be announced soon between the two companies, although no specific amount was mentioned in the report.
Broadcom's potential purchase of VMware comes after Dell Technologies spun off its stake in VMware back in November. Buying VMware would expand Broadcom's footprint in the hybrid cloud computing market.
Before today, VMware's share price was down about 40% over the past year. But today's gains have erased some of those losses.
It's worth mentioning that making acquisition deals in this current macroeconomic environment would be more of the exception than the rule. With inflation still very high, investors -- and some companies -- are growing increasingly concerned about the potential for an economic slowdown in the U.S.
Still, Broadcom may be eager to find a company to purchase after last year's bid to purchase the software company SAS Institute didn't work out.
Technology deals often get a lot of attention from investors, and this potential acquisition is no exception. VMware investors may be especially eager to see a deal considering that the stock market -- and tech stocks in particular -- have performed terribly over the past year.
Investors will get a better picture of how VMware is doing when the company reports its latest financial results on Thursday. Broadcom reports next week.
Nothing is set in stone yet, but investors from both companies will want to keep a close eye on any news surrounding this potential deal.