Nutanix (NTNX) is expected to attract customers away from rival VMware, now owned by Broadcom (AVGO), according to an analyst who upgraded Nutanix’s stock on Wednesday. The software maker’s stock experienced a rise ahead of its fiscal third-quarter earnings report scheduled for May 29. Nutanix offers cloud-computing network management software and saw its stock rise 2.8% to 67.15 in morning trading.
Raymond James analyst Simon Leopold increased his rating on Nutanix stock from neutral to outperform. Leopold noted that Broadcom’s actions to boost growth and performance for VMware have resulted in bundling and higher price increases, which may cause some customers to consider Nutanix as an alternative. Dell Technologies (DELL) sold VMware to Broadcom in a $69 billion deal that was finalized in November, allowing Broadcom to focus on enhancing its software and services business.
Although Leopold warned that it might take customers years to migrate from VMware to Nutanix due to the complexities of networking technologies, he also highlighted the benefits of Nutanix’s partnership with Cisco Systems (CSCO). Nutanix’s stock has seen a 38% increase so far in 2024, with a substantial 169% gain over the past year. Nutanix is viewed as a potential takeover target while continuing to reach new highs in its relative strength line.
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