Nutanix (NTNX) is expected to win over customers from competitor VMware, now owned by Broadcom (AVGO), according to a recent report by Raymond James analyst Simon Leopold. The software maker’s stock rose in anticipation of its upcoming fiscal third-quarter earnings report, which is due on May 29. On the stock market today, Nutanix stock increased by 2.8% to $67.15 in morning trading.
Leopold raised his rating on Nutanix stock from neutral to outperform, citing Broadcom’s efforts to boost growth and performance for VMware as a reason for customers exploring alternative options like Nutanix. While Broadcom has been acquiring companies to strengthen its software and services business, some customers may find the unexpectedly high price increases and bundling of products as a result of the acquisition unpalatable.
Despite potential sales advantages as part of Broadcom, Nutanix recently formed a marketing partnership with Cisco Systems (CSCO). Leopold cautioned that it may take years for some customers to transition from VMware to Nutanix due to the complex networking technologies involved. However, he also noted that nutanix has been performing well in recent years, with an increase of 38% in 2024 and an impressive 169% rise from a year ago. According to IBD Stock Checkup, nutanix’s relative strength line has hit new highs, positioning it as a potential takeover target.
