Key Points
Nutanix (NASDAQ: NTNX) won’t be heading into the Thanksgiving holiday on a high note. The hybrid cloud computing specialist’s stock took a major hit on Wednesday, cratering by almost 18% after the release of a dispiriting quarterly earnings report.
A mixed start to fiscal 2026
After market close on Tuesday, Nutanix unveiled its fiscal first quarter of 2026 results. The company’s revenue grew by 13% year-over-year to $670.6 million, while net income not according to generally accepted accounting principles (GAAP) improved by 18% to hit $120.9 million ($0.41 per share). Annual recurring revenue (ARR), meanwhile, rose 18% to just under $2.3 billion.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Image source: Getty Images.
Nutanix’s revenue came in lower than the average analyst expectation of $676.9 million. The company’s non-GAAP (adjusted) profitability met the consensus estimate.
In its earnings release, Nutanix attributed the improvements to strong client demand; it pointed out that bookings were ahead of its expectations. It also cited expansions with partners Dell Technologies and Microsoft as catalysts for growth.
Double whiffs on guidance
Nutanix’s trailing numbers weren’t discouraging, but its guidance left something to be desired. The company is expecting to earn $705 million to $715 million in revenue for its current (second) quarter, which is quite some distance under the analyst consensus of almost $749 million. The adjusted net margin should be 20.5% to 21.5%.
It’s similar for the current fiscal year, as management is modeling revenue of $2.82 billion to $2.86 billion, but the collective pundit projection is $2.92 billion. Management believes the adjusted net margin for the 12-month period will be 21% to 22%.
As a maturing tech company, Nutanix is no longer posting the sky-high growth rates it once did, so it’s likely this is one source of investor disappointment. Those guidance misses are probably the main factor in the Wednesday sell-off, though, and the market isn’t very forgiving of such whiffs these days.
Yet the company is still on a growth path and offers in-demand services, so I think the bears overreacted in their rush to unload the stock.
Should you invest $1,000 in Nutanix right now?
Before you buy stock in Nutanix, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nutanix wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $563,022!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,090,012!*
Now, it’s worth noting Stock Advisor’s total average return is 991% — a market-crushing outperformance compared to 192% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
*Stock Advisor returns as of November 24, 2025
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends Nutanix and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
5 Stocks Our Experts Predict Could Double In the Next Year
By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.
