TLDR
- Advanced Micro Devices is acquiring $150 million in Nutanix (NTNX) shares priced at $36.26 each.
- An additional $100 million will support collaborative engineering initiatives and market expansion strategies.
- Both firms plan to develop a comprehensive, open AI infrastructure solution targeting agentic AI use cases.
- NTNX shares spiked more than 20% during premarket hours before closing up 3.38% for the session.
- Industry analysts believe this partnership enhances Nutanix’s position in AI and increases merger interest.
Shares of Nutanix (NTNX) experienced significant gains Thursday following the unveiling of a strategic alliance with Advanced Micro Devices (AMD). The comprehensive agreement encompasses direct equity participation and shared development funding worth $250 million.
The semiconductor giant committed to acquiring $150 million in NTNX shares through a fixed-price transaction set at $36.26 per share. This direct investment approach, rather than open market purchases, signals strong confidence from AMD in Nutanix’s future prospects.
Additionally, AMD pledged $100 million toward shared engineering initiatives and collaborative market strategies. The partnership aims to deliver what both organizations characterize as a comprehensive, open AI infrastructure solution designed specifically for agentic AI deployments.
Shares of NTNX skyrocketed over 20% during early premarket activity Thursday morning. However, by the opening bell, those gains had moderated to approximately 3.8%, ultimately finishing the session with a 3.38% advance.
Trading activity reached elevated levels throughout the day. Over 5.4 million shares were exchanged, substantially exceeding the three-month average daily volume of roughly 4.32 million shares.
Despite Thursday’s positive momentum, NTNX remains underwater for 2024, down 22.52% year-to-date, and has declined 49.78% over the trailing twelve months. While the day’s rally didn’t reverse these losses, it provided shareholders with renewed optimism.
The timing proved advantageous as Nutanix disclosed its Q4 financial results Wednesday evening, surpassing Wall Street’s earnings and revenue projections. This strong performance created favorable conditions for the AMD partnership announcement to resonate with investors.
What Analysts Are Saying
Brandon Nispel from KeyBanc retained his Overweight recommendation on NTNX while maintaining a $65 price objective. He indicated he “would be buying Nutanix as AMD investment likely sparks renewed enthusiasm” and highlighted the upcoming .NEXT conference scheduled for April as a possible catalyst.
Matthew Hedberg of RBC Capital Markets noted the AMD collaboration “likely increases Nutanix’s AI relevance” and elevates the company’s attractiveness from a merger and acquisition standpoint. He acknowledged that supply-chain challenges are creating extended lead times for certain clients.
AMD’s Busy Week
This partnership announcement follows a pattern of strategic moves by AMD. Earlier in the week, the chip manufacturer disclosed a significant long-term agreement with Meta Platforms, which propelled AMD shares upward by 9% on Tuesday. That Meta arrangement included warrant provisions potentially granting Meta up to a 10% ownership position in AMD.
AMD shares retreated approximately 2% Thursday, surrendering a portion of the week’s earlier advances.
Tarkan Maner, President and Chief Customer Officer at Nutanix, stated the collaboration represents “a shared vision for scalable, production-ready AI infrastructure,” emphasizing inference capabilities and agentic applications throughout hybrid computing environments.
In related developments, Avalon GloboCare (ALBT) experienced sharp gains Thursday after securing acceptance into the AMD AI Developer Program, illustrating widespread market enthusiasm for AMD-affiliated collaborations.
As trading concluded Thursday, NTNX settled with a 3.38% gain, though the $65 KeyBanc target price still implies considerable appreciation potential from present valuations.
