Nutanix's (NTNX) growth continues to moderate as revenue timing, higher server costs and original equipment manufacturer mix continue to limit top-line visibility, Morgan Stanley said in a Tuesday note.

Morgan Stanley said its latest conversations with Nutanix's partners were broadly steady quarter-over-quarter, with one large reseller saying performance is in line with expectations, with growth moderating into the mid-teens. This moderation is likely caused by scale and some budget is reallocated to artificial intelligence, it added.

Servers, meanwhile, are facing higher memory costs, but Morgan Stanley said it does see meaningful pull-forward demand.

Ahead of Nutanix's fiscal Q2 results due Wednesday, Morgan Stanley expects the company to generate revenue of $709.7 million, versus consensus of $709.9 million and guidance of $705 million to $715 million. For fiscal 2026, the brokerage expects revenue of $2.84 billion, in-line with consensus while company guides $2.82 billion to $2.86 billion.

A material re-rating of the stock is unlikely until investors get clarity on deal mix, revenue conversion, and the sustainability of double-digit growth.

Morgan Stanley maintained an equal weight rating on Nutanix and lowered the price target to $56 from $62.

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