Core Viewpoint - The performance of storage systems is crucial for enhancing overall training efficiency in AI, as insufficient storage performance can significantly limit GPU utilization [2] Summary by Sections MLPerf Storage v2.0 and Testing Loads - MLPerf Storage is a benchmark suite designed to replicate real AI training loads, assessing storage systems' performance in distributed training environments [3] - The latest version, v2.0, includes three types of training loads that represent the most common I/O patterns in deep learning [3] Specific Training Loads - The 3D U-Net medical segmentation load requires handling large 3D medical images, focusing on throughput performance during sequential reads [4] - The ResNet-50 image classification load emphasizes high-concurrency random reads, demanding high IOPS from storage systems [4] - The CosmoFlow cosmological prediction load tests small file concurrent access and bandwidth scalability, requiring stable metadata handling and low latency [4][5] Performance Comparison Standards - The testing involved various vendors with different storage types, making horizontal comparisons limited; the focus is on shared file systems for more relevant conclusions [6] - Shared file systems are categorized into Ethernet-based systems and InfiniBand (IB) network solutions, each with distinct performance characteristics [7] Test Results Interpretation - For the 3D U-Net load, Ethernet-based storage products like Oracle and JuiceFS excelled, with JuiceFS supporting the most H100 GPUs and achieving a bandwidth utilization of 86.6% [11] - IB network solutions provided high total bandwidth but often exhibited lower bandwidth utilization, typically below 50% [14] - The CosmoFlow load highlighted the challenges of reading numerous small files, with JuiceFS and Oracle leading in GPU support [16][18] - The ResNet-50 load required high IOPS, with JuiceFS supporting the most GPUs and achieving a bandwidth utilization of 72% among Ethernet solutions [21][24] Conclusion - Understanding the type of storage product, including architecture and hardware resources, is essential for evaluating GPU utilization [27] - Ethernet-based storage solutions offer flexibility and cost-effectiveness while providing excellent performance, making them a popular choice for large-scale AI training [27]

Core Insights - Zacks Premium offers various tools to help investors make informed decisions and enhance their confidence in the stock market [1][2] Zacks Style Scores - Zacks Style Scores are indicators that rate stocks based on value, growth, and momentum characteristics, aiding investors in selecting stocks likely to outperform the market in the short term [2][3] - Each stock receives a rating from A to F, with A indicating the highest potential for outperformance [3] Value Score - The Value Score focuses on identifying undervalued stocks by analyzing financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [3] Growth Score - The Growth Score assesses a company's financial health and future outlook by examining projected and historical earnings, sales, and cash flow [4] Momentum Score - The Momentum Score evaluates stocks based on price trends and earnings estimate changes, helping investors identify optimal buying opportunities [5] VGM Score - The VGM Score combines the Value, Growth, and Momentum Scores, providing a comprehensive indicator for stock selection [6] Zacks Rank - The Zacks Rank is a proprietary model that leverages earnings estimate revisions to guide investors in building successful portfolios [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +23.81%, significantly outperforming the S&P 500 [7] Stock Selection Strategy - To maximize returns, investors should target stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [9] - Stocks with lower ranks but high Style Scores may still carry risks due to downward earnings outlooks [10] Company Spotlight: Nutanix Inc. - Nutanix Inc. specializes in enterprise cloud operating systems, offering integrated solutions for server, storage, virtualization, and networking [11] - Currently rated 3 (Hold) with a VGM Score of B, Nutanix is positioned as a potential growth investment [11] - The company forecasts a year-over-year earnings growth of 17.3% for the current fiscal year, with upward revisions in earnings estimates from analysts [12]

Upgrades - RBC Capital upgraded Sealed Air (SEE) to Outperform from Sector Perform with a price target of $48, up from $35, citing stabilization in Protective and continued strength in Food segments, along with over $100 million of cost reductions and G&A optimization [2] - Citi upgraded Tractor Supply (TSCO) to Buy from Neutral with a price target of $62, up from $60, noting same-store sales momentum and earnings growth heading into 2026 [2] - Piper Sandler upgraded PNC Financial (PNC) to Overweight from Neutral with a price target of $220, up from $211, expressing confidence in PNC's near-term prospects due to its conservative guidance and attractive valuation [3] - HSBC upgraded Iqvia (IQV) to Buy from Hold with a price target of $235, up from $195, expecting easing regulatory clouds in pharma to support a re-rating of the shares [3] - MoffettNathanson upgraded Roblox (RBLX) to Neutral from Sell, acknowledging that user metrics have significantly improved driven by new viral experiences [4] Downgrades - Jefferies downgraded Freshpet (FRPT) to Hold from Buy with a price target of $53, down from $97, citing an abrupt and persistent growth slowdown and lack of near-term catalysts [5] - HSBC downgraded Bloom Energy (BE) to Hold from Buy with a price target of $100, up from $44, while expecting consensus estimates to revise higher but awaiting a better entry point [5] - RBC Capital downgraded Graphic Packaging (GPK) to Sector Perform from Outperform with a price target of $21, down from $25, due to oversupply in bleached paperboard limiting price increases [5] - JPMorgan downgraded RenaissanceRe (RNR) to Neutral from Overweight with an unchanged price target of $303, adopting an incrementally cautious view on reinsurance pricing [5] - Northland downgraded Nutanix (NTNX) to Market Perform from Outperform with a price target of $76, highlighting risks related to VMware customer migrations and competition from Red Hat [5]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market engagement and confidence [1] - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market in the short term [2] Zacks Style Scores Overview - Stocks are rated from A to F based on value, growth, and momentum characteristics, with A indicating the highest potential for outperformance [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score [3][4][5][6] Value Score - Focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales [3] Growth Score - Evaluates a company's financial health and future growth potential through earnings, sales, and cash flow analysis [4] Momentum Score - Targets stocks experiencing upward or downward price trends, utilizing recent price changes and earnings estimate shifts [5] VGM Score - Combines all three Style Scores to identify stocks with the best value, growth, and momentum characteristics [6] Zacks Rank Integration - The Zacks Rank leverages earnings estimate revisions to guide investors in building successful portfolios, with 1 (Strong Buy) stocks achieving an average annual return of +23.81% since 1988 [7] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal success [9] Stock Example: Nutanix (NTNX) - Nutanix Inc. provides an integrated enterprise cloud operating system and is currently rated 3 (Hold) with a VGM Score of B [11] - The company is positioned well for growth, with a Growth Style Score of A and a projected year-over-year earnings growth of 17.3% for the current fiscal year [12] - Recent upward revisions in earnings estimates and a strong earnings surprise average of +20.2% further enhance Nutanix's attractiveness to investors [12]

Core Insights - Aligned Data Centers successfully raised $12 billion at the beginning of the year to expand its infrastructure in response to the growing demand for AI facilities [1][6] - The company is currently in advanced discussions for a potential $40 billion acquisition by BlackRock's Global Infrastructure Partners, which could be one of the largest transactions in the data center sector [2][3] - AI-related companies have seen significant investment, with $141 billion in corporate credit issuance this year, surpassing last year's total of $127 billion [3] Company Overview - Founded in 2013, Aligned focuses on providing custom data centers with an emphasis on efficiency and sustainability, currently managing or developing 78 data centers across the Americas [5] - Aligned has raised funds to build out 5 gigawatts of data center capacity, enough to power half of New York City on a hot day, although much of this capacity is still in the planning stages [6][7] - The company currently has over 600 megawatts of operational capacity and an additional 700 megawatts under construction, positioning it as a significant player in the market [7] Market Context - The demand for AI infrastructure is driving companies like Aligned to expand rapidly, with tech firms prepared to invest hundreds of billions in physical infrastructure [4] - Aligned's potential revenue, based on industry-standard pricing, could reach nearly $1.6 billion annually, increasing to $3.4 billion when including capacity under construction [9] - Comparatively, Coreweave Inc., another cloud provider, has a market value exceeding $65 billion, highlighting the high valuations in the AI infrastructure market [8][10]

Company Performance - Nutanix (NTNX) closed at $75.53, reflecting a +1.53% change from the previous day's closing price, outperforming the S&P 500's daily gain of 0.34% [1] - Over the past month, Nutanix shares have appreciated by 10.83%, surpassing the Computer and Technology sector's gain of 8.07% and the S&P 500's gain of 3.54% [1] Upcoming Earnings - Analysts expect Nutanix to report earnings of $0.41 per share, indicating a year-over-year decline of 2.38% [2] - Revenue is forecasted to be $676.53 million, representing a 14.48% growth compared to the same quarter last year [2] Full Year Projections - For the full year, earnings are projected at $1.89 per share and revenue at $2.92 billion, reflecting changes of +16.67% and +15.11% respectively from the prior year [3] Analyst Estimates - Recent modifications to analyst estimates for Nutanix indicate short-term business trends, with positive revisions suggesting analyst optimism regarding the company's profitability [4] - The Zacks Consensus EPS estimate has shifted 1.42% downward over the past month, and Nutanix currently holds a Zacks Rank of 3 (Hold) [6] Valuation Metrics - Nutanix is trading at a Forward P/E ratio of 39.46, which is a premium compared to the industry average Forward P/E of 16.84 [7] - The company has a PEG ratio of 2.82, while the Computers - IT Services industry has an average PEG ratio of 1.98 [8] Industry Context - The Computers - IT Services industry is part of the Computer and Technology sector, currently holding a Zacks Industry Rank of 87, placing it in the top 36% of over 250 industries [9]

Core Viewpoint - Nutanix, Inc. (NASDAQ: NTNX) is positioned for robust growth and is gaining market share from VMware, indicating a positive outlook for the company [1] Company Analysis - The investment strategy focuses on long-term growth while also considering short-term opportunities to enhance returns [1] - The analysis emphasizes a bottom-up approach, assessing the fundamental strengths and weaknesses of Nutanix [1] - The company is identified as having solid fundamentals, sustainable competitive advantages, and significant growth potential [1]

Core Insights - Nutanix reported strong Q4 fiscal 2025 results, with non-GAAP earnings of 37 cents per share, exceeding estimates by 15.63% and showing a year-over-year increase of 60.8% [2] - Revenues for the quarter rose 19% year-over-year to $653.3 million, surpassing the Zacks Consensus Estimate by 1.63% [2] Financial Performance - Product revenues, accounting for 52% of total revenues, increased by 28% year-over-year to $339.8 million [4] - Support, entitlements, and other services revenues rose 11% to $313.5 million, while subscription revenues climbed 19% to $616 million, representing 94.3% of total revenues [5] - Professional services revenues improved by 8% to $28.9 million, and other non-subscription product revenues surged 238% to $8.4 million [5] - Billings increased by 8% year-over-year to $726.9 million, and annual recurring revenues grew by 17% to $2.22 billion [5] Customer Growth - During the fiscal fourth quarter, Nutanix added 800 new customers, bringing the total client count to 29,290 [6] Operating Metrics - Non-GAAP gross margin expanded by 140 basis points year-over-year to 88.3% [7] - Non-GAAP operating expenses rose by 13% year-over-year to $457.2 million, with non-GAAP operating income increasing by $49.0 million to $119.5 million [8] - Non-GAAP operating margin was reported at 18.3%, exceeding the guided range of 15.5-16.5% and up by 540 basis points compared to the previous year [8] Balance Sheet and Cash Flow - As of July 31, 2025, cash and cash equivalents plus short-term investments totaled $1.99 billion, an increase from $1.88 billion at the end of the previous quarter [9] - Cash generated from operating activities during the fourth quarter was $219.5 million, with free cash flow amounting to $207.8 million [9] Future Outlook - For Q1 fiscal 2026, Nutanix estimates revenues between $670 million and $680 million, with a non-GAAP operating margin expected in the range of 19.5-20.5% [10] - For fiscal 2026, revenues are projected to be between $2.90 billion and $2.94 billion, with free cash flow anticipated in the range of $790 million to $830 million [11] Market Sentiment - Recent estimates for Nutanix have shown a downward trend, indicating a shift in market expectations [12][14] - The company currently holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [14]

Part I [Business Overview](index=6&type=section&id=Item%201.%20Business) Nutanix is a hybrid multicloud computing leader, providing a unified software platform for applications and AI, simplifying distributed app and data management. - Nutanix is a hybrid multicloud computing leader, offering a unified software platform for running applications and AI and managing data anywhere, with a vision to simplify distributed app and data operations[19](index=19&type=chunk) - The Nutanix Cloud Platform supports diverse workloads including business-critical applications, data platforms, enterprise AI (machine learning, generative AI, agentic AI), general-purpose, end-user computing, and cloud-native applications[20](index=20&type=chunk) - Nutanix has transitioned to a subscription-based business model, offering term-based licenses and SaaS subscriptions typically ranging from one to five years, with support and entitlements included[21](index=21&type=chunk)[22](index=22&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - Key growth strategies include landing new end customers through targeted sales and marketing, expanding sales to existing customers by targeting new workloads and upselling, and driving renewals and retention for profitable growth[40](index=40&type=chunk)[44](index=44&type=chunk) - The company had over **29,000 end customers** as of July 31, 2025, across diverse industries, with approximately **77% of customers** with Nutanix for 18+ months making repeat purchases[39](index=39&type=chunk)[329](index=329&type=chunk) [Overview](index=6&type=section&id=Overview) Nutanix is a hybrid multicloud computing leader focused on simplifying distributed application and data management through its unified software platform. - Nutanix is a hybrid multicloud computing leader, offering a unified software platform for running applications and AI and managing data anywhere[19](index=19&type=chunk) - The company's mission is to delight customers with an open, secure platform with rich data services that increases their ability to take advantage of new technologies such as cloud native and AI, optimizes how they run their organizations today, and accelerates innovation, efficiency, and growth[19](index=19&type=chunk) - Nutanix pioneered hyperconverged infrastructure (HCI) and developed its native hypervisor, Nutanix AHV, transitioning to a subscription-based business model[21](index=21&type=chunk) [The Nutanix Cloud Platform](index=6&type=section&id=The%20Nutanix%20Cloud%20Platform) The Nutanix Cloud Platform provides a consistent operating model for applications and data across core data centers, edge, and public clouds. - The Nutanix Cloud Platform provides a consistent cloud operating model for running applications and managing data in core data centers, at the edge, and in public clouds[20](index=20&type=chunk) - It supports diverse workloads including business-critical applications, data platforms, enterprise AI (machine learning, generative AI, agentic AI), general-purpose workloads, end-user computing, and cloud-native applications[20](index=20&type=chunk) - Key components include Nutanix Cloud Infrastructure (NCI) for distributed HCI, Nutanix Cloud Manager (NCM) for unified management, Nutanix Kubernetes Platform (NKP) for enterprise-grade Kubernetes, Nutanix Unified Storage (NUS) for consolidated data services, Nutanix Database Service (NDB) for automated database management, and Nutanix Enterprise AI (NAI) for centralized inferencing[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) [Delivery of Our Solutions](index=9&type=section&id=Delivery%20of%20Our%20Solutions) Nutanix solutions are deployed across various environments, offered via subscription licenses, with hardware typically purchased from partners. - The Nutanix Cloud Platform can be deployed in core data centers, at the edge, or in public/managed clouds (AWS, Microsoft Azure, Google Cloud via NC2), running on various qualified hardware platforms[31](index=31&type=chunk) - Subscription term-based licenses typically range from one to five years, with cloud-based SaaS subscriptions extending up to five years[31](index=31&type=chunk) - Customers generally purchase qualified hardware platforms from channel partners or OEMs, and support and entitlements are included within subscription fees[31](index=31&type=chunk)[32](index=32&type=chunk) [Our Partners](index=9&type=section&id=Our%20Partners) Nutanix leverages a diverse partner ecosystem, including channel, OEM, and cloud partners, to drive sales and solution adoption. - Nutanix leverages channel, OEM, ecosystem, and cloud partners to drive sales and adoption of its solutions[33](index=33&type=chunk) - Channel partners (distributors, resellers, MSPs, telcos, GSIs) represented **41% of total revenue** for fiscal 2025 from the top two distributors[34](index=34&type=chunk) - OEM partners (Cisco, Dell, Fujitsu, HPE, Lenovo) sell Nutanix software bundled with their hardware, including new solutions integrating with Dell PowerFlex and certifying Cisco UCS blade servers[35](index=35&type=chunk) - Ecosystem partners (e.g., AMD, Intel, Nvidia) integrate their products with Nutanix solutions, while cloud partners (AWS, Microsoft Azure, Google Cloud) extend the platform's reach[36](index=36&type=chunk)[37](index=37&type=chunk) [Our Support Programs](index=10&type=section&id=Our%20Support%20Programs) Nutanix provides various levels of software and hardware support, alongside professional services for optimal environment management. - Nutanix offers varying levels of software support and hardware support for Nutanix-branded NX platforms[38](index=38&type=chunk) - Professional services are provided for assessment, design, deployment, and optimization of Nutanix environments[38](index=38&type=chunk) [Our End Customers](index=10&type=section&id=Our%20End%20Customers) Nutanix serves a broad base of over **29,000 end customers** across diverse industries and also supports service providers. - Nutanix serves a broad and diverse base of over **29,000 end customers** as of July 31, 2025, across industries like financial services, retail, manufacturing, public sector, and technology[39](index=39&type=chunk) - The company also sells to service providers who use the Nutanix Cloud Platform to offer cloud-based services to their own customers[39](index=39&type=chunk) [Growth Strategy](index=10&type=section&id=Growth%20Strategy) Nutanix's growth strategy focuses on customer acquisition, expansion, and retention, while driving profitable growth and deepening partner engagement. - Key growth elements include landing new end customers through sales and marketing investments and partner networks, expanding sales to existing customers via a 'land-and-expand' strategy, and driving renewals and retention[40](index=40&type=chunk) - The company aims to build on its hybrid multicloud vision, deepen engagement with all partner types, and drive profitable growth by balancing investments with operational efficiencies[44](index=44&type=chunk) [Sales and Marketing](index=11&type=section&id=Sales%20and%20Marketing) Sales efforts involve a global force supporting partners, while marketing focuses on educating customers and promoting cloud platform capabilities. - Sales primarily involve a global sales force interacting directly with IT decision-makers and supporting channel partners and OEMs[42](index=42&type=chunk) - Marketing focuses on educating customers about the benefits of the cloud software platform, driving market awareness of virtualization, cloud-native, and enterprise AI-ready capabilities, and leveraging co-marketing with partners[43](index=43&type=chunk) [Research and Development](index=12&type=section&id=Research%20and%20Development) R&D efforts are dedicated to enhancing existing technologies, developing new solutions, and supporting current customer deployments. - R&D efforts focus on enhancing existing technologies, developing new ones in current and adjacent markets, and supporting existing customer deployments[45](index=45&type=chunk) - Significant resources are dedicated to global R&D teams to support solution enhancements, improve ecosystem partner integration, and expand platform technologies and features[45](index=45&type=chunk) [Manufacturing](index=12&type=section&id=Manufacturing) Nutanix does not manufacture hardware; its NX series platforms are manufactured by Super Micro Computer, Inc. - Nutanix does not manufacture hardware; its NX series hardware platforms are manufactured by Super Micro Computer, Inc. (Supermicro)[46](index=46&type=chunk) - Supermicro designs, assembles, and tests the Nutanix-branded hardware, procuring components from third-party suppliers[46](index=46&type=chunk) [Competition](index=12&type=section&id=Competition) Nutanix operates in intensely competitive cloud infrastructure and platform services markets, facing diverse competitors and evolving competitive factors. - Nutanix operates in intensely competitive cloud infrastructure and platform services markets, facing competition from software providers (VMware, Microsoft, Red Hat), public cloud providers (AWS, Google Cloud, Azure), and traditional IT systems vendors (Dell, HPE, NetApp)[47](index=47&type=chunk)[49](index=49&type=chunk) - Competitive factors include platform features, scalability, performance, ecosystem, management, total cost of ownership, customer choice, application mobility, and customer experience[50](index=50&type=chunk)[54](index=54&type=chunk) - The company has expanded into adjacent markets like Kubernetes management, data/platform services, AI platform services, and cloud management, facing new and established competitors[50](index=50&type=chunk) [Intellectual Property](index=13&type=section&id=Intellectual%20Property) Nutanix protects its intellectual property through patents, trademarks, copyrights, trade secrets, and confidentiality agreements. - Nutanix relies on patents, trademarks, copyrights, trade secret laws, confidentiality procedures, and employee agreements to protect its intellectual property[52](index=52&type=chunk) - As of July 31, 2025, the company had **578 issued U.S. patents** (expiring between 2033 and 2045) and **159 non-provisional patent applications** pending[52](index=52&type=chunk) [Facilities](index=13&type=section&id=Facilities) Nutanix's corporate

Group 1 - Nutanix Inc. stock price is currently at $74.43, reflecting a 3.45% decrease in the current market session, but has increased by 9.30% over the past month and 22.74% over the past year [1] - The P/E ratio of Nutanix is 118.6, which is higher than the aggregate P/E ratio of the Software industry at 116.15, suggesting that Nutanix may perform better than its industry peers, although it may also indicate that the stock is overvalued [6] - The P/E ratio is a useful metric for evaluating a company's market performance, but it should be used cautiously as it can indicate both undervaluation and weak growth prospects [8] Group 2 - A higher P/E ratio typically indicates that investors expect better future performance from the company, which may lead to optimism about rising dividends [5] - Investors should consider the P/E ratio alongside other financial ratios, industry trends, and qualitative factors for a comprehensive analysis of a company's financial health [8]