Nutanix (NTNX) expected to gain customers from VMware’s parent company Broadcom, as analyst raises outperform rating on software maker’s stock”.
Nutanix (NTNX) is expected to gain customers from competitor VMware, now owned by Broadcom (AVGO), according to a Raymond James 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). According to IBD Stock Checkup, Nutanix’s relative strength line has hit new highs, earning it “blue dot” status and positioning it as a potential takeover target.
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. Dell Technologies (DELL) sold VMware to chipmaker Broadcom last year in a $69 billion deal that closed in November. Broadcom has been acquiring companies to strengthen its software and services business.
Raymond James analyst Simon Leopold raised his rating on Nutanix stock to outperform from neutral, explaining that some customers are transitioning from VMware due to complex networking technologies involved, which may take years. Despite VMware’s potential sales advantages as part of Broadcom, Leopold cautioned that it may take time for some customers to transition from VMware to Nutanix due to the complexity of networking technologies involved.
Nutanix stock has increased by 38% in 2024 and is up 169% from a year ago
