Bank of America upgrades this cloud computing stock that can surge nearly 50%


Bank of America says Nutanix is a multilever growth story with a promising future. Analyst Wamsi Mohan upgraded the shares from neutral to buy. He also raised his price target from $39 to $50, indicating a 48.1% potential upside from Wednesday’s closing. “We expect fundamentals to improve over the next couple of years, including ACV billings and revenue. In a note published on Thursday, Mohan stated that he expects operating leverage from lower renewal costs. Nutanix offers cloud solutions and software. Recently, it announced “GPT-in-a Box”, a software-defined platform. The product was designed to make generative AI adoption easier while still allowing businesses to retain control of their data. Nutanix has also formed a partnership with Cisco which Mohan believes is going to help the company grow. Analyst Mohan said that the partnership would combine “the Nutanix Cloud Platform with Cisco’s UCS computing, cloud management and networking, as well as security.” Cisco’s vast reach will be a benefit to NTNX as it markets its hybrid multi-cloud software. Mohan believes that the company will also benefit from Broadcom acquiring VMware, a cloud computing competitor. Mohan said that if Broadcom decides to focus on VMware’s biggest customers, Nutanix could gain market share by gaining other customers. Mohan believes Nutanix will exceed Wall Street’s consensus estimates ahead of the company’s analyst day, which is scheduled for later this month. He cited several risk factors, including increased competition from established brands such as Dell Enterprise and HP Enterprise as well as a lackluster performance at large accounts. Stocks rose 2.8% before Thursday’s market opening. Stock has risen nearly 30% in the past year. Michael Bloom, a CNBC reporter, contributed to this article.