Nutanix (NTNX) will grab customers from rival VMware, now owned by Broadcom (AVGO), said an analyst who upgraded Nutanix on Wednesday. The software maker’s stock rose ahead of its fiscal third-quarter earnings report due on May 29.

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On the stock market today, Nutanix stock rose 1.4% to close at 66.21. Further, Nutanix sells cloud-computing network management software.

Meanwhile, Raymond James analyst Simon Leopold hiked his rating on Nutanix stock to outperform from neutral.

“Broadcom’s efforts to improve growth and performance for VMware have led to bundling and higher than expected price hikes, which will lead some customers to seek alternatives in certain instances from Nutanix,” Leopold said in a report.

Dell Sells VMware To Broadcom

Dell Technologies (DELL) sold VMware to chipmaker Broadcom last year. The $69 billion deal closed in November. Broadcom has been making acquisitions to boost its software and services business.

Leopold cautioned that it could take “years for some customers to migrate” from VMware to Nutanix because of complex networking technologies involved.

Also, while VMware could have sales synergies as part of Broadcom, Nutanix recently forged a marketing partnership with Cisco Systems (CSCO).

Nutanix stock has climbed 38% in 2024. Further, Nutanix stock has gained 169% from a year ago. According to IBD Stock Checkup, Nutanix’s relative strength line has been hitting new highs, giving it “blue dot” status.

Meanwhile, Nutanix also has been viewed as a possible takeover target.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.

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