Nutanix (NTNX) is back on investor radar after reporting third quarter fiscal 2026 results that topped its own guidance on revenue and prompted an increase to the full year outlook.

Nutanix shares have reacted quickly to the Q3 beat and raised guidance, with a 1 day share price return of 6.68% and a 30 day share price return of 27.34%. Even so, total shareholder return has fallen 32.10% over the past year. The 3 year and 5 year total shareholder returns of 70.44% and 55.53% suggest longer term holders have still seen meaningful gains, pointing to improving short term momentum after a tougher recent period.

If Nutanix’s earnings move has caught your attention, this can be a good moment to look across the AI infrastructure space and see which other stocks are gaining traction via the 47 AI infrastructure stocks.

With the stock up sharply in the past month but still showing a decline over the past year, the key question now is simple: Is Nutanix still undervalued, or is the market already pricing in future growth?

Most Popular Narrative: 4.8% Undervalued

At a last close of $52.07 against a narrative fair value of $54.68, Nutanix is framed as modestly undervalued, with that view built on detailed growth and margin assumptions discounted at 8.8%.

Innovation in AI-driven and software-defined offerings, including enhanced AI capabilities (GPT-in-a-Box 2.0, Nutanix Enterprise AI), support for external storage, and integrated container management differentiates the platform in an increasingly data

and automation-focused environment, paving the way for higher gross margins and long-term margin expansion.

Want to see what kind of revenue path and profit profile sit behind that fair value, and how rich the future earnings multiple needs to be to support it? The most followed narrative spells out a detailed growth runway, margin lift and required valuation reset that are all worth weighing against your own expectations.

Result: Fair Value of $54.68 (UNDERVALUED)

However, this depends on Nutanix converting bookings into revenue despite server supply constraints and avoiding pricing pressure from larger cloud and IT competitors.

Another Way to Look at It

The narrative fair value of $54.68 suggests Nutanix is modestly undervalued, but the current P/E of 50.8x is far above the US Software industry at 28.5x and a fair ratio of 36.5x, even if it sits below peers at 74.8x. Is the premium a safety margin or a valuation risk?

Next Steps

With sentiment pulling in different directions, this is a good time to look at the numbers yourself and decide how the balance of risks and rewards stacks up. To pressure test your view against the data, start by weighing these 3 key rewards and 2 important warning signs

Looking for more investment ideas?

If Nutanix has sharpened your focus, do not stop here. Broaden your watchlist now so you are not late to the next opportunity.

• Target potential bargains by scanning 46 high quality undervalued stocks that combine quality fundamentals with prices that may not fully reflect them yet.
• Strengthen your income stream by reviewing 10 dividend fortresses built around higher yielding companies that still aim to keep payouts supported.
• Prioritise resilience by checking 63 resilient stocks with low risk scores that score well on financial health and volatility, so you can focus on compounders instead of constant surprises.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.