Deal Brewing Between HPE and NTNX; To Fortify Cloud Offerings

Hewlett Packard Enterprise (NYSE:HPE), an edge-to-cloud platform-as-a-service company, has expressed interest in acquiring Nutanix (NASDAQ:NTNX), Bloomberg reported, citing people familiar with the matter. However, the report highlighted that these companies have yet to reach an agreement. 

HPE focuses on strategic acquisitions to accelerate its growth, fill its product portfolio gaps, and strengthen its competitive positioning. Nutanix, which is a cloud computing company, appears to be a natural fit for the company. 

Both companies have previously formed alliances to provide hybrid cloud as a service. Later, they extended the collaboration with a new database as a service offering to capitalize on hybrid cloud and multi-cloud adoption.

HPE recently delivered Q4 financials, wherein revenues increased by 7% to $7.9 billion, its second-highest quarterly revenue on a continuing operations basis (learn more about HPE’s financials here). Moreover, Nutanix delivered 15% year-over-year growth in its revenues in Q1 of Fiscal 2023. 

Is HPE a Buy or Sell?

HPE stock recovered its lost ground in 2022 and is up about 8.2% on a year-to-date basis. Further, the stock has a Moderate Buy consensus rating on TipRanks based on five Buy, four Hold, and two Sell recommendations. Meanwhile, analysts’ price target of $15.91 implies a 5.2% upside potential.

Importantly, hedge funds sold 47.2M HPE stock last quarter. However, HPE stock commands an Outperform Smart Score of eight on TipRanks. 

Is Nutanix a Good Stock to Buy?

Nutanix stock received eight Buy and three Hold recommendations for a Moderate Buy consensus rating. Analysts’ average price target of $28.70 implies 1.6% upside potential.

Our data shows that hedge funds acquired 782.7K NTNX stock last quarter. Also, NTNX stock sports an Outperform Smart Score of eight on TipRanks.

Disclosure