Nutanix (NTNX) has recently been predicted to attract customers away from its competitor VMware, now owned by Broadcom (AVGO), according to an analyst who upgraded Nutanix on Wednesday. The software maker’s stock rose in anticipation of its fiscal third-quarter earnings report due on May 29. On the stock market today, Nutanix stock rose 2.8% to 67.15 in morning trading.
Nutanix sells cloud-computing network management software and has recently formed a marketing partnership with Cisco Systems (CSCO). Raymond James analyst Simon Leopold raised his rating on Nutanix stock to outperform from neutral, explaining that Broadcom’s efforts to enhance growth and performance for VMware have resulted in bundling and unexpectedly high price increases, prompting some customers to explore alternatives like Nutanix. Despite VMware’s potential sales advantages as part of Broadcom, Leopold cautioned that it may take years for some customers to transition from VMware to Nutanix due to complex networking technologies involved.
Despite this challenge, the company has been performing well so far in 2024 with an increase of 38%. In addition, its stock has increased by 169% from a year ago, earning it “blue dot” status according to IBD Stock Checkup, positioning it as a potential takeover target. The company’s relative strength line has hit new highs and it is worth keeping an eye on for updates on artificial intelligence, cybersecurity, and cloud computing developments following Reinhardt Krause on Twitter @reinhardtk_tech.