Nutanix (NTNX) has drawn fresh attention after launching an open-source Model Context Protocol server for Nutanix Cloud Platform, giving enterprise customers a way to use AI assistants for cloud operations with built-in security and governance.

The MCP server launch comes after a steady run in Nutanix’s share price, with a 30-day share price return of 17.08% and a 90-day share price return of 41.96%. Over the same period, the 1-year total shareholder return declined 7.89%, while the 3-year total shareholder return is up 113.65%. This suggests that short-term momentum has picked up on top of a stronger multi-year track record.

If this kind of AI driven cloud story interests you, it can be worth seeing what else is out there via the 55 AI infrastructure stocks

Nutanix has run hard into this MCP story, yet the stock now sits above the average analyst target while internal estimates still point to a discount. So where does fair value actually land in that spread?

Most Popular Narrative: 10% Overvalued

The most followed Nutanix narrative pegs fair value at $58.98 using an 8.64% discount rate. This sits below the latest $64.65 close, so the current price is ahead of that framework.

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 profile and margin path are built into that fair value for Nutanix? The narrative leans heavily on recurring contracts, richer profitability, and a premium earnings multiple usually reserved for sector leaders. The full breakdown shows how those moving parts are combined to arrive at that single $58.98 figure.

Result: Fair Value of $58.98 (OVERVALUED)

However, Nutanix still faces real pressure from public cloud competitors and rising operating costs, which could challenge the growth and margin assumptions behind that $58.98 fair value.

Another View: Nutanix Through the SWS DCF Lens

The most followed Nutanix narrative points to a fair value of $58.98 and calls the stock about 10% overvalued. Our DCF model tells a different story. On that framework, Nutanix at $64.65 sits roughly 24% below an $84.62 estimate of future cash flow value.

That gap is wide enough to make investors ask a simple question: Is the market paying too much attention to near term earnings multiples and not enough to the longer term cash flow profile?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Nutanix for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

If this Nutanix story feels finely balanced between opportunity and concern, it can help to act quickly and review the underlying data yourself. To weigh both sides clearly, take a look at the 3 key rewards and 3 important warning signs

Looking for more Nutanix style investment ideas?

Do not stop with Nutanix. The next opportunity might already be on your radar if you keep scanning the market with a disciplined set of filters.

• Zero in on potential bargains by checking companies that currently screen as 49 high quality undervalued stocks
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• Protect your downside by concentrating on companies that appear in the 85 resilient stocks with low risk scores

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.