- Nutanix (NTNX) is expected to gain customers from competitor VMware, following its acquisition by Broadcom (AVGO), according to an analyst who recently upgraded Nutanix.
- The software company’s stock has seen a rise in anticipation of its fiscal third-quarter earnings report due on May 29.
- Raymond James analyst Simon Leopold has increased his rating on Nutanix stock from neutral to outperform.
Nutanix (NTNX) is set to benefit from Broadcom’s acquisition of VMware, as customers seek alternatives due to expected price hikes. Nutanix stock is on the rise ahead of its Q3 earnings report.
Analyst Upgrades Nutanix Amid VMware Acquisition
Simon Leopold, an analyst at Raymond James, has upgraded his rating on Nutanix stock from neutral to outperform. He believes that Broadcom’s attempts to enhance growth and performance for VMware will result in bundling and higher than anticipated price increases. This, he suggests, will prompt some customers to look for alternatives from Nutanix.
VMware Sold to Broadcom by Dell Technologies
Dell Technologies (DELL) sold VMware to chipmaker Broadcom last year in a deal worth $69 billion, which closed in November. Broadcom has been actively making acquisitions to bolster its software and services business. However, Leopold warns that it could take “years for some customers to migrate” from VMware to Nutanix due to the complex networking technologies involved.
Nutanix’s Recent Developments and Performance
While VMware could potentially benefit from sales synergies as part of Broadcom, Nutanix has recently entered into a marketing partnership with Cisco Systems (CSCO). Nutanix stock has risen by 38% in 2024 and has seen a 169% increase from a year ago. According to IBD Stock Checkup, Nutanix’s relative strength line has been hitting new highs, earning it “blue dot” status. Nutanix has also been considered as a potential acquisition target.
Conclusion
Nutanix is poised to benefit from Broadcom’s acquisition of VMware, as customers seek alternatives due to expected price hikes. With a recent upgrade from a Raymond James analyst and a strong performance on the stock market, Nutanix is a company to watch in the coming months.
