Shares of Nutanix (NASDAQ:NTNX) rose as much as 13.8% on Monday morning. As of 3 p.m., EDT, the stock had retreated to a still-meaty 9.9% gain.
The enterprise cloud computing specialist soared on the wings of a high-profile analyst upgrade. Goldman Sachs lifted Nutanix from neutral to buy with a $31 price target, or roughly twice Nutanix's closing price on Friday.
Goldman analyst Simona Jankowski sees the recent sell-off as a "very attractive opportunity" to build a position in Nutanix. The stock has plunged 53% lower over the last 52 weeks, including today's sudden upward surge.
Beyond the simple share price discount, Jankowski feels that the hybrid cloud market where Nutanix operates is set to become the biggest IT revolution in years. I don't disagree with that analysis, but Nutanix must still prove that it can hold on to a position of leadership in a rising sea of competition -- often from companies with much longer operating histories as well as larger research and development and marketing budgets.
So Goldman's rosy report lifted Nutanix today and holds some important keys to the company's future. Still, I'm happy to stay on the sidelines until Nutanix can prove its long-term worth.