Nutanix (NASDAQ: NTNX) is up about 8.2% at $70.78, as reported by StockAnalysis.com at 2:43pm ET Thursday. It's been a wild session: the stock was up as much as 13.8% early before fading to +6.9% by 10:54am ET, per The Motley Fool, then grinding back up. The trigger was Wednesday's Q4 FY26 report.

What happened

Revenue came in at $757.1m, up 16% year-on-year — above the company's own $725–745m guide and above the ~$738.3m analysts expected. Annual recurring revenue hit $2.549bn, also +16%. Non-GAAP earnings were $0.60 a share against $0.49 expected and $0.37 a year ago.

Why it actually moved

Not the revenue beat — that was ~2.5% and largely pre-flagged. The jolt was profitability. Non-GAAP operating margin landed at 26.2% versus guidance of 21–23%, and versus 18.3% a year earlier: 790 basis points of expansion in twelve months, on 16% growth. Software companies rarely buy margin and growth at the same time.

Then the forward number: Nutanix guided FY27 free cash flow to $850–950m, after generating $840.7m in FY26. On a $19.13bn market cap, the midpoint is roughly a 4.7% free-cash-flow yield from a business still compounding double digits.

The $1.2bn number you should ignore

Here's the thing most headlines got wrong. Nutanix reported GAAP net income of $1,269.6m for the quarter — against $38.7m a year earlier. That is not a business that suddenly got 33x more profitable. It's an accounting event: the company released the valuation allowance on its US deferred tax assets, worth $1,208.2m.

In plain English: Nutanix has years of accumulated tax losses it wasn't allowed to count as an asset, because accountants make you write them off until you can prove you'll earn enough to use them. Now that it's reliably profitable, it can put them back on the balance sheet — and the entire write-back lands in one quarter's profit line. It's real money (lower cash tax for years), but it's a one-time entry that will never repeat.

Is it expensive?

This is exactly why the screener will lie to you. Nutanix's trailing P/E reads 13.71 — deep-value territory. That number is entirely manufactured by the tax release above. Strip it out and the honest figure is the forward P/E of 30.77 (StockAnalysis.com, 2:43pm ET).

Compare with NetApp (NASDAQ: NTAP) the same afternoon: a $37.24bn company on a trailing P/E of 30.53 and a forward P/E of 21.50. So on the headline number Nutanix looks less than half NetApp's price. On the number that matters, it's about 43% more expensive. UBS, which raised its target to $80 from $62 on 25 August, values it near 18x CY27 free cash flow — a growth multiple, not a value one.

The business

Nutanix sells hyperconverged infrastructure software: one layer that bundles compute, storage and virtualisation so a company can run its own data centre on ordinary servers instead of specialised kit. It's sold by subscription, which is why ARR matters more than any single quarter. It added 650 customers in Q4 to reach 32,360, and over 3,000 across FY26.

Who it touches

• Broadcom (AVGO) — the share donor. Nutanix's growth is substantially VMware customers leaving after Broadcom's repricing. CEO Rajiv Ramaswami said in April he is targeting ~165,000 of Broadcom's estimated 300,000 VMware customers, and that customer sentiment toward Broadcom "continues to be negative".
• Server OEMs (Dell, HPE, Lenovo) — Nutanix ships on their boxes, so their pricing and lead times set its deal timing.
• NetApp, Pure Storage — chasing the same enterprise infrastructure budget line.

The one thing that would flip this

Growth is decelerating on the company's own guide: FY27 revenue of $3.18–3.23bn is about 12.5% growth, down from the 16% just delivered. Management built in conservatism for "continued server supply constraints, elevated lead times, and additional hardware price increases" — pricier servers push enterprise projects out a quarter. Analyst Jason Ader also flags the FY27 renewals cohort growing slower as the renewals base gets bigger. At 30.8x forward earnings, there's no cushion for a guide-down.

As of 2:43pm ET, 27 Aug 2026. Sources: Nutanix Q4 FY26 results release, StockAnalysis.com, Investing.com, The Motley Fool, Blocks & Files, SDxCentral. For discussion and education only — not investment advice. Verify before acting.