I am going to come right out and say it: VMware
Small miss, big impact
A quick scan of VMware's financial data shows it trading at 104 times earnings at the time of this writing, which is more than double the computer software and services industry's already lofty average of 46. Stocks with such a high P/E ratio relative to their industry also tend to make massive corrections off relatively minor amounts of bad news. Just take a look at the most recent example of Equinix's
Putting all their eggs in one basket
VMware derives 90% of its all-important licensing revenue from data center products like vSphere, its enterprise virtualization suite, which is being directly targeted by Microsoft, Oracle, and Citrix
VMware is not "The Cloud"
There is a lot of hype surrounding cloud computing. There are huge benefits such as cost savings, flexibility, and the ability to scale when your business grows. However VMware does not target this cloud demographic. Instead it is going after "private clouds" promising cost savings through better utilization and lower maintenance. There is a problem, however. As IT administrators move all of their hardware into virtualized clouds, they are simply replacing the cost of hardware with the cost of software. However, businesses still need to buy enough hardware to handle peak load. I just don't see them shutting down servers when they are not needed to save on power costs. This is where the public cloud comes into play. Public cloud providers can sell that extra processing power when it is not needed by a client, getting closer to full-utilization nirvana, and few of the major providers are using VMware products.
Wrapping it up
With its sky-high P/E ratio and vulnerable revenue stream, VMware is bound for a correction. As IT administrators start to scrutinize the real cost of VMware and compare it with lower cost and free offerings they may have to decrease their price. Lastly, the private cloud may not be all it's cracked up to be and VMware just is not a player in the public cloud. Put them all together, and you have a stock that is overvalued.