Core Insights - The article discusses the best software infrastructure stocks to buy according to hedge funds, highlighting the potential growth in the software application layer driven by AI infrastructure spending [1][4]. Industry Overview - An estimated $45 trillion opportunity may arise in the software application layer as AI infrastructure spending increases, similar to the early days of cloud computing [2]. - Data center investments are accelerating, with billions already invested, leading to a 9x multiplier for the implied enterprise value of software companies, which benefit from this spending [3]. Company Analysis - F5 Inc. (NASDAQ:FFIV) has a market cap of $15.6 billion and is held by 40 hedge funds. RBC Capital Markets upgraded its rating to Outperform with a price target increase to $325, indicating a 27% upside potential [8]. - F5's stock has declined by approximately 25% since mid-October 2025 due to a significant security breach, but RBC views this as a favorable entry point [11]. - Medium-term growth drivers for F5 include cloud repatriation, AI-driven workload monetization, and a focus on security solutions [12][13]. - Nutanix Inc. (NASDAQ:NTNX) has a market cap of $14.4 billion and is held by 47 hedge funds. RBC Capital lowered its price target to $65 but maintained an Outperform rating, indicating confidence in long-term growth despite near-term momentum concerns [14]. - RBC noted an increase in M&A activity in the software sector, with Nutanix identified as a leading candidate for acquisition in the infrastructure, security, and analytics space [16].

Core Viewpoint - Pomerantz LLP is investigating potential securities fraud or unlawful business practices involving Nutanix, Inc. and its officers or directors, following disappointing financial results and a significant stock price drop [1][3][4]. Financial Performance - On November 25, 2025, Nutanix reported first-quarter fiscal year 2026 revenue that was near the lower end of its prior guidance, attributing this to a late quarter revenue shift due to increased customer demand for flexible start dates and growth through third-party OEM partners [3]. - The company revised its full-year revenue projection down from a range of $2.9 billion to $2.94 billion to a new range of $2.82 billion to $2.86 billion [3]. Stock Market Reaction - Following the announcement of the financial results, Nutanix's stock price fell by $10.43 per share, representing a 17.8% decline, closing at $48.34 per share on November 26, 2025 [4].

Core Viewpoint - Bragar Eagel & Squire, P.C. is investigating potential claims against Nutanix, Inc. regarding possible violations of federal securities laws and unlawful business practices [1][2]. Group 1: Investigation Details - On November 25, 2025, Nutanix reported first quarter fiscal 2026 revenue results that were at the bottom end of its prior guidance, leading to a significant revenue projection cut for the full year from $2.9 billion - $2.94 billion to $2.82 billion - $2.86 billion [2]. - The decline in revenue was attributed to a late quarter revenue shift due to increased customer demand for flexible start dates and growth through third-party OEM partners [2]. - Following this announcement, Nutanix's share price fell by $10.43, or approximately 17.8%, from $58.77 to $48.34 [2]. Group 2: Next Steps - Investors who purchased or acquired Nutanix shares and experienced losses are encouraged to contact Bragar Eagel & Squire for more information regarding their rights and potential claims [3]. Group 3: About the Law Firm - Bragar Eagel & Squire, P.C. is a nationally recognized law firm with a focus on representing individual and institutional investors in various types of litigation, including securities and commercial cases [4]. - The firm operates nationwide and handles cases in both federal and state courts [4].

Core Viewpoint - Kirby McInerney LLP is investigating potential claims against Nutanix, Inc. regarding possible violations of federal securities laws or unlawful business practices by the Company or its senior management [1] Group 1 - Nutanix published its first quarter fiscal 2026 revenue results on November 25, 2025, after the market closed [1]

Core Viewpoint - Nutanix, Inc. has announced an accelerated share repurchase agreement to buy back $300 million of its common stock, reflecting confidence in its business and growth potential [1][2] Group 1: Share Repurchase Details - The accelerated share repurchase (ASR) will be funded with existing cash and is part of Nutanix's ongoing share repurchase authorization [1] - Nutanix has already repurchased $82.5 million of its common stock in the current fiscal year, bringing the total expected repurchase to approximately $382.5 million since the beginning of fiscal year 2026 [1] - Under the ASR agreement, Nutanix will pay $300 million to Bank of America and expects to receive about 4,972,032 shares, which represents 80% of the payment value [2] Group 2: Company Outlook and Strategy - The CEO of Nutanix emphasized the strong balance sheet, which allows the company to innovate, invest in the business, and provide returns to shareholders [2] - The final settlement of the ASR is anticipated to occur before the end of January 2026, with the total number of shares repurchased being based on the volume-weighted average price of Nutanix common stock during the ASR term [2] Group 3: Company Background - Nutanix is recognized as a leader in hybrid multicloud computing, providing a unified software platform for application management and data handling [4] - The company serves over 29,000 customers globally, aiding in digital transformation and efficient management of hybrid multicloud environments [4]

Core Viewpoint - Nutanix shares have experienced a significant decline, dropping approximately 40% from September highs and over 20% in the past three weeks, following a disappointing earnings report that included a revenue miss and reduced forward guidance [2][3]. Financial Performance - The recent earnings report revealed a revenue miss and a reduction in forward guidance, which typically triggers selling pressure among investors [3]. - Management indicated that many deals closed late in the quarter, leading to delayed revenue recognition, which contributed to the revenue miss but did not affect free cash flow [4]. - Despite the drop, the quarter was noted as the best-ever for revenue booked, suggesting that the market reaction may have been excessive [4][6]. Technical Analysis - The technical setup for Nutanix shows signs of improvement, with bears unable to push the stock lower since early December, indicating a potential shift in control to bullish investors [5]. - Nutanix's stock is currently at early-2024 price levels after a 40% decline since September, with technical pressure easing as momentum stabilizes from oversold conditions [6]. Market Sentiment - Analysts maintain a broadly bullish outlook, suggesting that the recent sell-off reflects timing issues rather than fundamental weaknesses in the business [6].

Core Viewpoint - Nutanix (NTNX) stock has experienced a significant decline of 29.7% in less than a month, dropping from $67.71 on November 12, 2025, to $47.58 currently, with potential for further decline to $33 based on historical performance [2] Historical Performance - Historically, NTNX has met the criteria for a significant dip (30% or more decline within 30 days) on 9 occasions since January 1, 2010 [4] - The median return for NTNX stock in the 12 months following significant dips is 0.4%, with a median peak return of 34% [3][7] - The median time to reach peak return after a dip event is 189 days, while the median maximum drawdown within one year of the dip event is -46% [7] Investment Strategy - A portfolio-based approach is recommended for those uncertain about investing in NTNX stock, as individual stocks can be unpredictable [5][4] - The Trefis High Quality (HQ) Portfolio, which includes 30 stocks, has historically outperformed benchmarks like the S&P 500, S&P mid-cap, and Russell 2000 indices, providing better returns with less risk [6]

Core Insights - Nutanix has announced enhancements to its Nutanix Cloud Platform (NCP) aimed at providing organizations with greater flexibility in deploying and managing infrastructure across distributed environments, including traditional, modern, and AI applications [1][3][4] Group 1: New Capabilities and Features - The new capabilities in NCP allow customers to run and govern infrastructure across their own environments and with cloud providers offering sovereign services, enhancing focus on resilience, security, and control [3][4] - NCP now supports orchestrated lifecycle management of multiple dark-site environments and on-premises deployment options for governance and control planes, enhancing security and management [5] - The Nutanix Government Cloud Clusters (GC2) solution on AWS is now available, enabling federal agencies to build and operate a distributed sovereign cloud while maintaining orchestration within their environment [6] Group 2: Security and Compliance - NCP on Azure and AWS has successfully completed its annual SOC 2 Type 2 audit and renewed several ISO certifications, providing independent validation of its security and compliance controls [8] - The Nutanix Kubernetes Platform (NKP) will include a FIPS 140-3–validated and STIG-compliant Ubuntu Pro image option, catering to organizations with strict security requirements [9] - Enhanced security features in the Nutanix Enterprise AI (NAI) solutions include stronger identity integration and fine-grained access controls for AI models [11] Group 3: Resilience and Disaster Recovery - New capabilities in NCP enhance resilience by ensuring application availability across sites and regions during outages, crucial for sovereignty-aligned environments [12] - Organizations can now apply tiered disaster recovery options that match protection levels to each workload, ensuring business continuity even during multiple site failures [13][14] Group 4: Management and Operational Efficiency - NCP offers stronger management capabilities that streamline deployment and operation of distributed environments, providing consistent control across various sites and cloud providers [15][16] - The introduction of Nutanix Infrastructure Manager simplifies deployments using validated design patterns, making it easier to maintain data center environments [15] Group 5: Customer and Industry Perspectives - Customers like LFB Group emphasize the importance of data sovereignty and compliance, highlighting how Nutanix Cloud Clusters on OVHcloud help modernize infrastructure while ensuring data security [18] - Industry leaders recognize the growing priority of distributed sovereign cloud architectures, noting Nutanix's role in operationalizing these frameworks to assist with compliance and governance needs [20][21]

Question-and-Answer SessionSo yes, we've got a bunch of stuff to discuss here, but maybe we'll start with some of the hotter topics. Obviously, last quarter with the rev rec dynamics, maybe you can kind of look at this in a few parts, the talk about greater flexibility from customers, the talk about some of the third-party OEMs. So maybe walk us through kind of the changing dynamics that you guys experienced in those aspects?Rukmini SivaramanPrincipal Accounting Officer & CFO Yes. So why don't I start with ...

Nutanix FY Conference Summary Company Overview - **Company**: Nutanix (NasdaqGS: NTNX) - **Date of Conference**: December 11, 2025 Key Points Industry Dynamics - **Revenue Recognition Changes**: Nutanix experienced a shift in revenue recognition due to customers requesting more flexibility in license deployment, leading to a portion of revenue being deferred to future periods [5][6] - **Annual Recurring Revenue (ARR)**: ARR was reported to be up 26% year-over-year, with current remaining performance obligations (CRPO) up 17% year-over-year [7][10] - **Third-Party OEM Growth**: The company is seeing a growing mix of business through OEM partners like Cisco, Dell, and Lenovo, which is beneficial for expanding into new accounts [14][15] Financial Performance - **Bookings and Revenue**: Bookings slightly exceeded expectations, but revenue came in at the low end of guidance due to deferred orders [5][6] - **Operating Margin Target**: Nutanix maintained its operating margin target of 21%-22% for fiscal year 2026, despite revenue disruptions [62][63] - **Renewals Business**: The renewals business is expected to grow year-over-year, providing a stable foundation for future revenue [60][61] Competitive Landscape - **Market Positioning Against VMware**: Nutanix is in a long-term migration cycle, with significant customer additions indicating a shift away from VMware solutions [38][39] - **Pricing Dynamics**: The pricing environment remains dynamic, with Nutanix focusing on providing better total cost of ownership (TCO) compared to competitors like Broadcom [45][46] Technology and Product Development - **AI and Hybrid Cloud**: Nutanix is positioning itself to support AI applications in hybrid environments, providing a turnkey infrastructure for enterprises [30][32] - **Kubernetes Infrastructure**: The company has developed a full-fledged Kubernetes platform, allowing customers to run modern applications alongside legacy systems [34] Supply Chain Considerations - **Component Shortages**: There are emerging concerns about supply chain shortages affecting hardware availability, which could impact software deployment [17][22] - **Diversification Strategy**: Nutanix has diversified its hardware compatibility to mitigate supply chain risks, allowing customers to run software on existing hardware [23] Partnerships and Collaborations - **OEM and Public Cloud Partnerships**: Nutanix has established partnerships with major players like AWS, Microsoft, and Google, enhancing its market reach and facilitating customer migrations [58] Future Outlook - **Growth Potential**: The company believes that the ongoing shift towards hybrid cloud and AI applications will drive future growth, with a broader platform offering beyond just hyper-converged infrastructure (HCI) [72][73] Additional Insights - **Customer Migration Success**: Nutanix has successfully managed large-scale migrations for significant clients, showcasing its capability to handle complex transitions without major disruptions [39][48] - **Market Expansion**: The company is focused on expanding its total addressable market (TAM) by supporting a wider range of storage solutions and configurations [57][73]