How Low Can NTNX Really Go In A Market Crash?
To accurately assess risk, investors must look at how an asset behaves when the system breaks. In the 8 major market dislocations since it began trading, Nutanix (NTNX) has averaged a -33% contraction, compared to the S&P 500’s -15% drop.
If you are an investor in NTNX stock, you might be asking: if the macroeconomic environment fractures, how far can this stock actually fall?
One of the ways to understand this is to simply see how the stock has performed during past market crashes.
How Does It Handle Growth & Demand Scare?
- Cash Rich, Low Price – Progress Software Stock to Break Out?
- Five-Year Tally: T-Mobile US Stock Delivers $51 Bil Gain
- Years of Rewards: $58 Bil From Verizon Communications Stock
- Adobe Stock Hits Key Support – Buying Opportunity?
- Super Micro Computer Stock Pulls Back to Support – Smart Entry?
- Booking Stock Delivers Strong Cash Yield – Upside Ahead?
2020 COVID-19 Crash (Feb 2020 to Apr 2020)
- A novel coronavirus triggered pandemic fears. Italy’s healthcare collapse and a March 2020 Saudi-Russia oil price war signaled uncontainable disruption.
- Governments shut economies, triggering the fastest bear market in history. Unlimited QE and $2.2T fiscal stimulus drove a V-shaped recovery following vaccine development.
NTNX stock experienced -67% drawdown during this event, compared to -34% for the S&P and -0.7% for bonds.
What Happens During Rate & Valuation Shock?
2016-2017 Trump Reflation Bond Selloff (Sep 2016 to Jun 2017)
- Trump’s 2016 victory signaled massive fiscal stimulus and deregulation. Bond markets repriced on surged borrowing and growth, jumping 10-year yields toward 2.6%.
- This rotation shock saw equities rally while defensive yield sectors fell as their income advantage narrowed against rising Treasury yields. It was not broad distress.
NTNX stock saw -61% drawdown vs -3.7% for the S&P and -15% for bonds.
How It Fares During Positioning & Commodity Unwind?
2024 Yen Carry Trade Unwind (Jul 2024 to Aug 2024)
- The BOJ’s July 31, 2024 hike triggered yen appreciation, collapsing carry trade economics. A weak U.S. jobs report subsequently raised recession fears.
- The Nikkei fell 12.4% on August 5. Tech stocks hit hardest before the BOJ walked back signals and recession fears proved premature.
The drawdown for NTNX stood at -22% compared to -7.8% for the S&P and -1.2% for bonds.
Past Market Shock Drawdowns Summarized For NTNX
| Shock Event | S&P | Bonds | Sector | Stock |
|---|---|---|---|---|
| 2016-2017 Trump Reflation Bond Selloff | -3.7% | -15% | -3.8% | -61% |
| Q4 2018 Fed Policy Error / Growth Scare | -19% | -2.2% | -24% | -17% |
| 2020 COVID-19 Crash | -34% | -0.7% | -31% | -67% |
| 2022 Inflation Shock & Fed Tightening | -24% | -35% | -33% | -57% |
| 2023 SVB Regional Banking Crisis | -6.7% | -4.3% | -5.1% | -18% |
| Summer-Fall 2023 Five Percent Yield Shock | -9.5% | -17% | -10% | -4.1% |
| 2024 Yen Carry Trade Unwind | -7.8% | -1.2% | -17% | -22% |
| 2025 US Tariff Shock | -19% | -3.8% | -26% | -19% |
[1] 2016-2017 Trump Reflation Bond Selloff: Trump’s election spurred fiscal stimulus hopes, rotating capital from bonds into cyclicals.
[2] Q4 2018 Fed Policy Error / Growth Scare: Powell’s hawkish comments and trade war fears triggered the worst December since 1931.
[3] 2020 COVID-19 Crash: Pandemic lockdowns caused history’s fastest bear market before massive stimulus drove recovery.
[4] 2022 Inflation Shock & Fed Tightening: 9.1% CPI forced aggressive rate hikes, crushing both stocks and bonds simultaneously.
[5] 2023 SVB Regional Banking Crisis: SVB’s rate-driven bond losses triggered a social-media bank run, seized by FDIC.
[6] Summer-Fall 2023 Five Percent Yield Shock: Strong economic data pushed 10-year yields to 5%, compressing yield-sensitive sector valuations.
[7] 2024 Yen Carry Trade Unwind: BOJ rate hike unwound yen carry trades, briefly crashing tech stocks globally.
[8] 2025 US Tariff Shock: 145% China tariffs crashed equities and the dollar on supply chain disruption fears.
So What Can You Do For Your Investments?
While the headline panic over macroeconomic shocks can be deafening, letting fear dictate your trades leaves your portfolio highly exposed. Drawdowns of this magnitude are embedded in NTNX’s historical profile. If the thesis for owning the business remains intact, a steep contraction during a Growth & Demand Scare environment should be viewed as the baseline expectation, not a fundamental failure.
This is where rule-based portfolio investment approach, such as Trefis High Quality Portfolio (HQ) makes a difference. It allows you to stay invested when markets are fearful and volatile by dampening the risk. HQ has returned > 105% since inception.