Nutanix's (NTNX) $250 million investment and partnership with Advanced Micro Devices (AMD) to build an edge inference solution could set a floor on valuation, Morgan Stanley said in a note Thursday.

While the commercial impact is several quarters away, a strategic equity investment at about $36 likely signals a floor on valuation despite the limited revenue visibility, the report said.

The note also pointed to supply-chain issues on CPU availability and higher memory prices that impacted customers' ability to procure servers towards the second-half of Q2.

That led the company to cut its revenue growth expectations while Q2 revenue came in ahead of market expectations, it said.

"While revenue gets pushed out, bookings growth is sustaining in the mid-teens and new customer acquisition remains robust," the report said.

Morgan Stanley cut its price target to $53 from $56 while maintaining its equal weight rating on Nutanix.

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