What happened

Shares of Nutanix (NASDAQ:NTNX) fell 10.6% today after Morgan Stanley analyst Katy Huberty downgraded the cloud-computing software specialist from overweight to equal weight. Huberty also reduced her firm's per-share price target on Nutanix stock from $53 to $37 -- which, to be fair, still represented a roughly 5% premium from last Friday's close.

Data center mainframe with blue lighting.

Image source: Getty Images.

So what

To justify her relative bearishness, Huberty said she is worried that disappointing results from Nutanix's storage peers so far this earnings season may be indicative of a broader market slowdown. She also noted the company is facing increasing competition from companies like Dell Technologies

"We remain positive on Nutanix's technology portfolio, but now think a turnaround will take longer than the two to three quarters assumed by investors," Huberty added.

Now what

We should receive more color to that end when Nutanix releases fiscal third-quarter 2019 results this Thursday, May 30, after the market close. But given this note of caution, and with shares still reeling from a massive post-earnings drop in March after Nutanix's sales guidance for the quarter fell far short of investors' expectations, it's no surprise to see the stock falling in response today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.