Nutanix (NTNX) — Is It Ready to Pop?

June 30, 2025

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Today’s report includes market trends, upcoming catalysts, and a spotlight on Nutanix (NTNX), a cloud infrastructure player seeing accelerating growth and high-margin transformation.

Key Macro Notes:

  • Fed Policy Outlook: Markets are currently pricing in a 25 bps cut by September, but recent comments from Fed officials suggest a more cautious approach unless labor data softens further.

  • Inflation Signals: May’s Core PCE print of +0.2% MoM has kept inflation expectations anchored. Watch for ISM data this week.

  • Geopolitical Tension: Continued trade pressure on U.S. tech exports to China, particularly in AI and chip sectors, could drive volatility in tech-heavy indexes.

🏆 Stock Spotlight: Nutanix (NTNX)

Nutanix delivers enterprise cloud infrastructure solutions, transitioning from a hardware-heavy model to a scalable SaaS/subscription platform. It's positioned at the intersection of hybrid cloud, data center modernization, and enterprise AI deployment.

Why It Matters Now:

Q3 FY2025 Results (ended Apr 30):

  • Revenue up 22% YoY to $639M (beat consensus ~$626M)

  • Annual Recurring Revenue (ARR) grew 18% YoY to $2.14B

  • Free cash flow surged to $203M, up 160% YoY

  • Non-GAAP Operating Margin: 21.5%, signaling strong leverage

Strategic Drivers:

  • Recent .NEXT conference featured new AI-native capabilities and GPU-intensive infrastructure support (via NVIDIA partnership)

  • Multi-cloud demand accelerating: supports AWS, Azure, on-prem

Valuation Edge:

  • FWD P/E ~31x and FCF yield climbing, still trades at discount to other hybrid SaaS peers

Key Levels for Investors:

  • Accumulation Zone: $74.50 – $76.50

  • Growth Target (3–6 mo): $90.00 – $100.00

  • Support Level: $67.50

Catalysts to Watch:

  • Q4 earnings in late August

  • Expanded Pure Storage and NVIDIA deployments into federal and enterprise accounts

  • New customer additions or ARR beat in Q4 could accelerate multiple expansion

  • Watch: Tech sector ETF flows, cloud spend from mega-cap enterprises

Risks:

  • Competitive Landscape: Faces pressure from VMware (Broadcom-owned) and hyperscalers bundling services

  • Insider Selling: Significant recent insider sales (~$400M+) by execs under Rule 10b5-1 plans

  • Macro Sensitivity: Enterprise IT budgets tightening could affect contract renewals or expansions

Institutional & Insider Activity:

  • Institutional Ownership: ~86% of float held by funds

  • Insider Activity: Heavy selling in past 30 days—largest from Pieter de Groen (over 5M shares)

  • Options Flow: Mildly bullish flow on 80/90 strike calls for late 2025; implied vol elevated post-earnings

📅 Earnings & Market Events to Watch

Tuesday, July 1 – ISM Manufacturing PMI
Watch for signs of demand slowdown or resilience in core industries

Thursday, July 4 – U.S. Markets Closed for Independence Day

Late August – NTNX Q4 FY2025 Earnings Report

Stay informed, stay disciplined, and invest wisely!
—StocksTrades.AI Newsletter

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Disclaimer: This newsletter is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.