Credit Suisse's Nutanix Call Was Right On The Money

Shares of Nutanix Inc NTNX spiked higher by more than 8 percent Wednesday morning after the company stuck an agreement with Alphabet Inc GOOG GOOGL.

Nutanix sells hardware and software that makes it easier for companies to move between on-site servers and large cloud platforms. It has seen its stock fall by more than 20 percent since the start of 2017, but some Wall Street analysts recently called for an end to the stock's slump. Credit Suisse's Kulbinder Garcha said in a research report on Monday that its focus on large enterprises could "help both the existing customer deal size and the new customer deal size."

The analyst's call proved to be accurate as Nutanix's software will enable Google's applications to be wrapped in "digital containers" and deployed on Nutanix hardware or Google's cloud using Kubernetes, an open-source tool Google created, CNBC reported.

The integration will enable applications to move from on-premise data centers to Google's and will kick in early next year.

Perhaps more important, the agreement serves as indication that Nutanix is embracing the public cloud as a viable infrastructure choice and at the same time Google is becoming more accepting of the needs of enterprises, CNBC added.

"With public cloud, you have to meet them where they are — that's becoming increasingly clear," Nan Boden, Google's head of global alliances, told CNBC.

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