According to a recent report, Nutanix (NTNX) is expected to gain customers from its competitor VMware, which is now owned by Broadcom (AVGO), due to Broadcom’s efforts to improve growth and performance for VMware. This has resulted in unexpectedly high price increases and prompted some customers to explore alternatives like Nutanix. Despite this, Dell Technologies (DELL) sold VMware to chipmaker Broadcom last year in a $69 billion deal that closed in November.
Nutanix sells cloud-computing network management software and has recently formed a marketing partnership with Cisco Systems (CSCO). Its stock has increased by 38% in 2024 and is up 169% from a year ago. Additionally, Nutanix’s relative strength line has hit new highs, earning it “blue dot” status and positioning it as a potential takeover target.
Raymond James analyst Simon Leopold raised his rating on Nutanix stock to outperform from neutral, explaining that the transition from VMware to Nutanix may take years due to complex networking technologies involved. However, he cautioned that despite VMware’s potential sales advantages as part of Broadcom, the market for cloud-computing network management software is highly competitive and may not sustain these growth rates over the long term.