Oppenheimer has upgraded shares of VMware Inc. (NYSE:VMW) to outerform from perform on valuation.

VMW is exposed to strong secular growth drivers, the company is focused on a high grow markets, and management continues to deliver solid execution, analyst Shaul Eyal wrote in a note to clients.

According to IDC, VMW currently has 57.1 percent of the worldwide virtual machine market. The virtualization market today is about a total approach, where server and desktop virtualization are just one component of the system that will operate future data centers or clouds.

Investors have failed to grasp that so far only non-critical applications have been virtualized and customers are now looking to virtualize tier one applications. APAC, Latin America, and Eastern Europe regions are just now beginning to implement server virtualization providing new markets for the company to penetrate.

The company is leveraged to strong secular drivers, and we believe that current valuation levels do not fully reflect VMW's attractive market opportunities, added Eyal who has a price target of $100 on VMWare stock.