Key Takeaways
- Advanced Micro Devices will acquire $150 million in Nutanix (NTNX) shares at a fixed price of $36.26.
- An additional $100 million from AMD will support collaborative engineering and marketing initiatives.
- Both firms aim to develop a comprehensive, open AI infrastructure solution targeting agentic AI workloads.
- NTNX shares initially spiked over 20% in premarket hours before closing up 3.38%.
- Wall Street observers believe the alliance strengthens NTNX’s position in AI and potential acquisition scenarios.
Shares of Nutanix (NTNX) rallied Thursday following the company’s announcement of a significant strategic alliance with Advanced Micro Devices (AMD). The comprehensive agreement combines direct equity participation with collaborative development funding, totaling a $250 million commitment.
The semiconductor giant has committed to acquiring $150 million of Nutanix shares at a predetermined price of $36.26 per share. This fixed-price acquisition represents a strategic investment rather than open-market purchases, signaling strong conviction from AMD.
Additionally, AMD is allocating $100 million toward collaborative engineering initiatives and joint market strategies. The partnership’s primary objective is developing what the companies characterize as a comprehensive, open AI infrastructure solution designed specifically for agentic AI workloads.
NTNX shares initially rocketed more than 20% during premarket hours Thursday morning. However, once regular trading commenced, the advance moderated to approximately 3.8%, ultimately finishing the session up 3.38%.
Trading activity reached elevated levels throughout the day. Over 5.4 million shares were exchanged, surpassing the three-month average daily volume of roughly 4.32 million.
Despite Thursday’s advance, NTNX remains underwater 22.52% year-to-date and has declined 49.78% over the trailing twelve months. While Thursday’s movement didn’t reverse these losses, it provided momentum for potential recovery.
The partnership announcement came on the heels of Nutanix’s Q4 earnings release Wednesday evening, where the company exceeded analyst expectations for both earnings and revenue. This positive earnings backdrop amplified investor enthusiasm for the AMD collaboration.
Wall Street Weighs In
KeyBanc’s Brandon Nispel reiterated his Overweight rating on NTNX with a $65 price objective. He commented that investors “would be buying Nutanix as AMD investment likely sparks renewed enthusiasm” and highlighted the company’s upcoming .NEXT conference in April as a potential stock catalyst.
Matthew Hedberg from RBC Capital Markets noted the AMD collaboration “likely increases Nutanix’s AI relevance” and enhances the company’s attractiveness as a potential acquisition target. He did caution that supply-chain challenges are extending delivery timelines for certain clients.
AMD’s Active Partnership Strategy
This partnership represents AMD’s second major strategic announcement this week. Earlier, AMD unveiled an extensive agreement with Meta Platforms, which propelled AMD shares up 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% on Thursday, surrendering some of Tuesday’s gains.
Tarkan Maner, Nutanix’s President and Chief Commercial Officer, stated the collaboration embodies “a shared vision for scalable, production-ready AI infrastructure,” emphasizing inference capabilities and agentic applications across hybrid cloud environments.
In related news, Avalon GloboCare (ALBT) experienced a sharp rally Thursday after gaining acceptance into the AMD AI Developer Program, demonstrating broader market enthusiasm for AMD-associated partnerships.
As of Thursday’s closing bell, NTNX finished up 3.38%, with KeyBanc’s $65 price target indicating meaningful upside potential from current trading levels.
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