Goldman Sachs initiates Nutanix stock with Buy rating on cloud modernization potential

Investing.com

Published Jul 15, 2025 04:58AM ET

Goldman Sachs initiates Nutanix stock with Buy rating on cloud modernization potential

Investing.com - Goldman Sachs initiated coverage on Nutanix (NASDAQ:NTNX) with a Buy rating and a $95.00 price target on Tuesday. The company, currently trading at $72.46, has demonstrated strong momentum with a 40% return over the past year. According to InvestingPro data, analysts maintain a bullish consensus with price targets ranging from $78.54 to $100.

Goldman Sachs views Nutanix as a key modernization play for enterprises transitioning from legacy infrastructure, highlighting the company's Hyperconverged Infrastructure (HCI) platform that delivers cloud-like operations to on-premises environments by unifying compute, storage, and networking into a software-defined stack.

The firm notes that Nutanix's solutions offer more than 40% total cost of ownership savings, faster provisioning, and hybrid deployment flexibility compared to traditional infrastructure approaches.

Goldman Sachs identifies a significant opportunity for Nutanix to capture $300-$600 million in annual recurring revenue over four years (FY25-FY29) from VMware customer displacement following Broadcom (NASDAQ:AVGO)'s acquisition, as pricing, support, and packaging changes prompt customers to explore alternatives.

The firm also points to Nutanix's expanding partner ecosystem with Dell (NYSE:DELL), Cisco (NASDAQ:CSCO), and Pure Storage (NYSE:PSTG), along with its evolution into a hybrid multi-cloud orchestration platform addressing key IT priorities including cloud mobility, infrastructure automation, and AI enablement.

In other recent news, Nutanix reported its third-quarter fiscal year 2025 earnings, exceeding analysts' expectations with an earnings per share of $0.42 compared to the forecasted $0.38. The company also surpassed revenue projections, posting $639 million against an anticipated $594.44 million, marking a 22% year-over-year increase. Piper Sandler updated its outlook on Nutanix, raising the price target to $88 from $76, citing stable growth and strong momentum in new customer acquisitions. KeyBanc initiated coverage on Nutanix with an overweight rating and a $95 price target, highlighting the company's strategic position in hybrid multi-cloud environments and projecting mid-teens revenue growth. Additionally, Nutanix announced the resignation of board director Brian Stevens, with no disagreements cited regarding company operations or policies. Nutanix continues to strengthen its partnerships with major companies like Cisco and Dell, contributing to its competitive positioning. These developments reflect Nutanix's ongoing efforts to capitalize on market opportunities and enhance its financial performance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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