diff --git a/frontend/packages/console-app/locales/en/console-app.json b/frontend/packages/console-app/locales/en/console-app.json
index ce594b3c6a8..7e2d9ce2039 100644
--- a/frontend/packages/console-app/locales/en/console-app.json
+++ b/frontend/packages/console-app/locales/en/console-app.json
@@ -392,9 +392,6 @@
   "Inventory": "Inventory",
   "Images": "Images",
   "Image": "Image",
-  "Virtual machines": "Virtual machines",
-  "This count reflects your access permissions and might not include all virtual machines.": "This count reflects your access permissions and might not include all virtual machines.",
-  "Virtual machine": "Virtual machine",
   "Health checks": "Health checks",
   "See details": "See details",
   "{{ cpuMessage }}": "{{ cpuMessage }}",
@@ -412,6 +409,9 @@
   "Utilization": "Utilization",
   "Network transfer": "Network transfer",
   "Pod count": "Pod count",
+  "Virtual machines": "Virtual machines",
+  "This count reflects your access permissions and might not include all virtual machines.": "This count reflects your access permissions and might not include all virtual machines.",
+  "Virtual machine": "Virtual machine",
   "Node conditions": "Node conditions",
   "Reason": "Reason",
   "Updated": "Updated",
diff --git a/frontend/packages/console-app/src/components/nodes/node-dashboard/InventoryCard.tsx b/frontend/packages/console-app/src/components/nodes/node-dashboard/InventoryCard.tsx
index 6a2331c5961..d41b50da57b 100644
--- a/frontend/packages/console-app/src/components/nodes/node-dashboard/InventoryCard.tsx
+++ b/frontend/packages/console-app/src/components/nodes/node-dashboard/InventoryCard.tsx
@@ -11,8 +11,9 @@ import {
   DescriptionListTerm,
 } from '@patternfly/react-core';
 import { useTranslation } from 'react-i18next';
-import { Link } from 'react-router';
 import BareMetalInventoryItems from '@console/app/src/components/nodes/node-dashboard/BareMetalInventoryItems';
+import VirtualMachinesInventoryItems from '@console/app/src/components/nodes/node-dashboard/VirtualMachinesInventoryItems';
+import { FLAG_NODE_MGMT_V1 } from '@console/app/src/consts';
 import { useK8sWatchResource } from '@console/internal/components/utils/k8s-watch-hook';
 import { resourcePathFromModel } from '@console/internal/components/utils/resource-link';
 import { PodModel, NodeModel } from '@console/internal/models';
@@ -24,9 +25,7 @@ import {
   ResourceInventoryItem,
 } from '@console/shared/src/components/dashboard/inventory-card/InventoryItem';
 import { getPodStatusGroups } from '@console/shared/src/components/dashboard/inventory-card/utils';
-import { DescriptionListTermHelp } from '@console/shared/src/components/description-list/DescriptionListTermHelp';
-import { useIsKubevirtPluginActive } from '../../../utils/kubevirt';
-import { useWatchVirtualMachineInstances, VirtualMachineModel } from '../NodeVmUtils';
+import { useFlag } from '@console/shared/src/hooks/useFlag';
 import { NodeDashboardContext } from './NodeDashboardContext';
 
 export const NodeInventoryItem: FC<NodeInventoryItemProps> = ({ nodeName, model, mapper }) => {
@@ -56,9 +55,7 @@ export const NodeInventoryItem: FC<NodeInventoryItemProps> = ({ nodeName, model,
 const InventoryCard: FC = () => {
   const { obj } = useContext(NodeDashboardContext);
   const { t } = useTranslation();
-
-  const showVms = useIsKubevirtPluginActive();
-  const [vms, vmsLoaded, vmsLoadError] = useWatchVirtualMachineInstances(obj.metadata.name);
+  const nodeMgmtV1Enabled = useFlag(FLAG_NODE_MGMT_V1);
 
   return (
     <Card data-test-id="inventory-card">
@@ -89,32 +86,12 @@ const InventoryCard: FC = () => {
               />
             </DescriptionListDescription>
           </DescriptionListGroup>
-          <BareMetalInventoryItems />
-          {showVms ? (
-            <DescriptionListGroup>
-              <DescriptionListTermHelp
-                text={t('console-app~Virtual machines')}
-                textHelp={t(
-                  'console-app~This count reflects your access permissions and might not include all virtual machines.',
-                )}
-              />
-              <DescriptionListDescription>
-                <Link
-                  to={`${resourcePathFromModel(VirtualMachineModel)}/search?rowFilter-node=${
-                    obj.metadata.name
-                  }`}
-                >
-                  <InventoryItem
-                    isLoading={!vmsLoaded}
-                    title={t('console-app~Virtual machine')}
-                    titlePlural={t('console-app~Virtual machines')}
-                    count={vms.length}
-                    error={!!vmsLoadError}
-                  />
-                </Link>
-              </DescriptionListDescription>
-            </DescriptionListGroup>
-          ) : null}
+          {nodeMgmtV1Enabled && (
+            <>
+              <BareMetalInventoryItems />
+              <VirtualMachinesInventoryItems />
+            </>
+          )}
         </DescriptionList>
       </CardBody>
     </Card>
diff --git a/frontend/packages/console-app/src/components/nodes/node-dashboard/VirtualMachinesInventoryItems.tsx b/frontend/packages/console-app/src/components/nodes/node-dashboard/VirtualMachinesInventoryItems.tsx
new file mode 100644
index 00000000000..ae2a915c8c1
--- /dev/null
+++ b/frontend/packages/console-app/src/components/nodes/node-dashboard/VirtualMachinesInventoryItems.tsx
@@ -0,0 +1,54 @@
+import type { FC } from 'react';
+import { useContext } from 'react';
+import { DescriptionListDescription, DescriptionListGroup } from '@patternfly/react-core';
+import { useTranslation } from 'react-i18next';
+import { Link } from 'react-router';
+import {
+  useWatchVirtualMachineInstances,
+  VirtualMachineModel,
+} from '@console/app/src/components/nodes/NodeVmUtils';
+import { useIsKubevirtPluginActive } from '@console/app/src/utils/kubevirt';
+import { resourcePathFromModel } from '@console/internal/components/utils/resource-link';
+import { InventoryItem } from '@console/shared/src/components/dashboard/inventory-card/InventoryItem';
+import { DescriptionListTermHelp } from '@console/shared/src/components/description-list/DescriptionListTermHelp';
+import { NodeDashboardContext } from './NodeDashboardContext';
+
+const VirtualMachinesInventoryItems: FC = () => {
+  const { obj } = useContext(NodeDashboardContext);
+  const { t } = useTranslation();
+  const showVms = useIsKubevirtPluginActive();
+
+  const [vms, vmsLoaded, vmsLoadError] = useWatchVirtualMachineInstances(obj.metadata.name);
+
+  if (!showVms) {
+    return null;
+  }
+
+  return (
+    <DescriptionListGroup>
+      <DescriptionListTermHelp
+        text={t('console-app~Virtual machines')}
+        textHelp={t(
+          'console-app~This count reflects your access permissions and might not include all virtual machines.',
+        )}
+      />
+      <DescriptionListDescription>
+        <Link
+          to={`${resourcePathFromModel(VirtualMachineModel)}/search?rowFilter-node=${
+            obj.metadata.name
+          }`}
+        >
+          <InventoryItem
+            isLoading={!vmsLoaded}
+            title={t('console-app~Virtual machine')}
+            titlePlural={t('console-app~Virtual machines')}
+            count={vms.length}
+            error={!!vmsLoadError}
+          />
+        </Link>
+      </DescriptionListDescription>
+    </DescriptionListGroup>
+  );
+};
+
+export default VirtualMachinesInventoryItems;
diff --git a/frontend/packages/console-app/src/components/nodes/node-dashboard/__tests__/InventoryCard.spec.tsx b/frontend/packages/console-app/src/components/nodes/node-dashboard/__tests__/InventoryCard.spec.tsx
new file mode 100644
index 00000000000..4b0d1520bd1
--- /dev/null
+++ b/frontend/packages/console-app/src/components/nodes/node-dashboard/__tests__/InventoryCard.spec.tsx
@@ -0,0 +1,128 @@
+import { render, screen } from '@testing-library/react';
+import { useK8sWatchResource } from '@console/internal/components/utils/k8s-watch-hook';
+import type { NodeKind } from '@console/internal/module/k8s';
+import { useFlag } from '@console/shared/src/hooks/useFlag';
+import BareMetalInventoryItems from '../BareMetalInventoryItems';
+import InventoryCard from '../InventoryCard';
+import { NodeDashboardContext } from '../NodeDashboardContext';
+import VirtualMachinesInventoryItems from '../VirtualMachinesInventoryItems';
+
+jest.mock('@console/shared/src/hooks/useFlag', () => ({
+  useFlag: jest.fn(),
+}));
+
+jest.mock('@console/internal/components/utils/k8s-watch-hook', () => ({
+  useK8sWatchResource: jest.fn(),
+}));
+
+// Mock child components using jest.fn
+jest.mock('@console/app/src/components/nodes/node-dashboard/BareMetalInventoryItems', () => ({
+  __esModule: true,
+  default: jest.fn(() => null),
+}));
+
+jest.mock('@console/app/src/components/nodes/node-dashboard/VirtualMachinesInventoryItems', () => ({
+  __esModule: true,
+  default: jest.fn(() => null),
+}));
+
+// Mock InventoryItem components
+jest.mock('@console/shared/src/components/dashboard/inventory-card/InventoryItem', () => ({
+  InventoryItem: ({ count }) => `Images: ${count || 0}`,
+  ResourceInventoryItem: () => 'Pod Inventory',
+}));
+
+const useFlagMock = useFlag as jest.Mock;
+const useK8sWatchResourceMock = useK8sWatchResource as jest.Mock;
+const BareMetalInventoryItemsMock = BareMetalInventoryItems as jest.Mock;
+const VirtualMachinesInventoryItemsMock = VirtualMachinesInventoryItems as jest.Mock;
+
+describe('InventoryCard', () => {
+  const mockNode: NodeKind = {
+    apiVersion: 'v1',
+    kind: 'Node',
+    metadata: {
+      name: 'test-node',
+      uid: 'node-uid',
+    },
+    spec: {},
+    status: {
+      images: [{ names: ['image1'] }, { names: ['image2'] }],
+    },
+  };
+
+  const renderWithContext = (node: NodeKind = mockNode) => {
+    return render(
+      <NodeDashboardContext.Provider
+        value={{
+          obj: node,
+          setCPULimit: () => {},
+          setMemoryLimit: () => {},
+          setHealthCheck: () => {},
+        }}
+      >
+        <InventoryCard />
+      </NodeDashboardContext.Provider>,
+    );
+  };
+
+  beforeEach(() => {
+    jest.clearAllMocks();
+    useK8sWatchResourceMock.mockReturnValue([[], true, undefined]);
+  });
+
+  it('should render the inventory card with title', () => {
+    useFlagMock.mockReturnValue(false);
+    renderWithContext();
+
+    expect(screen.getByText('Inventory')).toBeVisible();
+  });
+
+  it('should render Pod and Image inventory items when NODE_MGMT_V1 flag state is false', () => {
+    useFlagMock.mockReturnValue(false);
+    renderWithContext();
+
+    expect(screen.getByText('Pods')).toBeVisible();
+    expect(screen.getByText('Pod Inventory')).toBeVisible();
+    expect(screen.getByText('Images')).toBeVisible();
+    expect(screen.getByText('Images: 2')).toBeVisible();
+  });
+
+  it('should render Pod and Image inventory items when NODE_MGMT_V1 flag state is true', () => {
+    useFlagMock.mockReturnValue(true);
+    renderWithContext();
+
+    expect(screen.getByText('Pods')).toBeVisible();
+    expect(screen.getByText('Pod Inventory')).toBeVisible();
+    expect(screen.getByText('Images')).toBeVisible();
+    expect(screen.getByText('Images: 2')).toBeVisible();
+  });
+
+  it('should not render BareMetalInventoryItems when NODE_MGMT_V1 flag is off', () => {
+    useFlagMock.mockReturnValue(false);
+    renderWithContext();
+
+    expect(BareMetalInventoryItemsMock).not.toHaveBeenCalled();
+  });
+
+  it('should not render VirtualMachinesInventoryItems when NODE_MGMT_V1 flag is off', () => {
+    useFlagMock.mockReturnValue(false);
+    renderWithContext();
+
+    expect(VirtualMachinesInventoryItemsMock).not.toHaveBeenCalled();
+  });
+
+  it('should render BareMetalInventoryItems when NODE_MGMT_V1 flag is on', () => {
+    useFlagMock.mockReturnValue(true);
+    renderWithContext();
+
+    expect(BareMetalInventoryItemsMock).toHaveBeenCalled();
+  });
+
+  it('should render VirtualMachinesInventoryItems when NODE_MGMT_V1 flag is on', () => {
+    useFlagMock.mockReturnValue(true);
+    renderWithContext();
+
+    expect(VirtualMachinesInventoryItemsMock).toHaveBeenCalled();
+  });
+});
diff --git a/frontend/packages/console-app/src/components/nodes/node-dashboard/__tests__/VirtualMachinesInventoryItems.spec.tsx b/frontend/packages/console-app/src/components/nodes/node-dashboard/__tests__/VirtualMachinesInventoryItems.spec.tsx
new file mode 100644
index 00000000000..e62a90f2305
--- /dev/null
+++ b/frontend/packages/console-app/src/components/nodes/node-dashboard/__tests__/VirtualMachinesInventoryItems.spec.tsx
@@ -0,0 +1,173 @@
+import { render, screen } from '@testing-library/react';
+import { useWatchVirtualMachineInstances } from '@console/app/src/components/nodes/NodeVmUtils';
+import { useIsKubevirtPluginActive } from '@console/app/src/utils/kubevirt';
+import type { K8sResourceKind } from '@console/dynamic-plugin-sdk/src';
+import type { NodeKind } from '@console/internal/module/k8s';
+import { NodeDashboardContext } from '../NodeDashboardContext';
+import VirtualMachinesInventoryItems from '../VirtualMachinesInventoryItems';
+
+jest.mock('@console/app/src/components/nodes/NodeVmUtils', () => ({
+  VirtualMachineModel: {
+    apiGroup: 'kubevirt.io',
+    apiVersion: 'v1',
+    kind: 'VirtualMachine',
+    plural: 'virtualmachines',
+  },
+  useWatchVirtualMachineInstances: jest.fn(),
+}));
+
+jest.mock('@console/app/src/utils/kubevirt', () => ({
+  useIsKubevirtPluginActive: jest.fn(),
+}));
+
+jest.mock('react-router', () => ({
+  Link: jest.fn(({ to, children }) => <a href={to}>{children}</a>),
+}));
+
+jest.mock('@console/internal/components/utils/resource-link', () => ({
+  resourcePathFromModel: jest.fn((model) => `/k8s/all-namespaces/${model.plural}`),
+}));
+
+jest.mock('@console/shared/src/components/dashboard/inventory-card/InventoryItem', () => ({
+  InventoryItem: jest.fn(({ title, count, isLoading, error }) => (
+    <div data-testid="inventory-item">
+      {isLoading ? 'Loading...' : error ? 'Error' : `${title}: ${count}`}
+    </div>
+  )),
+}));
+
+jest.mock('@console/shared/src/components/description-list/DescriptionListTermHelp', () => ({
+  DescriptionListTermHelp: jest.fn(({ text }) => <dt>{text}</dt>),
+}));
+
+const useIsKubevirtPluginActiveMock = useIsKubevirtPluginActive as jest.Mock;
+const useWatchVirtualMachineInstancesMock = useWatchVirtualMachineInstances as jest.Mock;
+
+describe('VirtualMachinesInventoryItems', () => {
+  const mockNode: NodeKind = {
+    apiVersion: 'v1',
+    kind: 'Node',
+    metadata: {
+      name: 'test-node',
+      uid: 'node-uid',
+    },
+    spec: {},
+    status: {},
+  };
+
+  const mockVirtualMachines: K8sResourceKind[] = [
+    {
+      apiVersion: 'kubevirt.io/v1',
+      kind: 'VirtualMachine',
+      metadata: {
+        name: 'vm1',
+        namespace: 'default',
+        uid: 'vm-uid-1',
+      },
+    },
+    {
+      apiVersion: 'kubevirt.io/v1',
+      kind: 'VirtualMachine',
+      metadata: {
+        name: 'vm2',
+        namespace: 'openshift-cnv',
+        uid: 'vm-uid-2',
+      },
+    },
+  ];
+
+  const renderWithContext = (node: NodeKind = mockNode) => {
+    return render(
+      <NodeDashboardContext.Provider
+        value={{
+          obj: node,
+          setCPULimit: () => {},
+          setMemoryLimit: () => {},
+          setHealthCheck: () => {},
+        }}
+      >
+        <VirtualMachinesInventoryItems />
+      </NodeDashboardContext.Provider>,
+    );
+  };
+
+  beforeEach(() => {
+    jest.clearAllMocks();
+  });
+
+  it('should not render when kubevirt plugin is not active', () => {
+    useIsKubevirtPluginActiveMock.mockReturnValue(false);
+    useWatchVirtualMachineInstancesMock.mockReturnValue([[], false, undefined]);
+
+    renderWithContext();
+
+    expect(screen.queryByTestId('inventory-item')).not.toBeInTheDocument();
+  });
+
+  it('should show loading state when data is loading', () => {
+    useIsKubevirtPluginActiveMock.mockReturnValue(true);
+    useWatchVirtualMachineInstancesMock.mockReturnValue([[], false, undefined]);
+
+    renderWithContext();
+
+    expect(screen.getByText('Loading...')).toBeInTheDocument();
+  });
+
+  it('should display error state when there is a load error', () => {
+    useIsKubevirtPluginActiveMock.mockReturnValue(true);
+    useWatchVirtualMachineInstancesMock.mockReturnValue([[], true, new Error('Failed to load')]);
+
+    renderWithContext();
+
+    expect(screen.getByText('Error')).toBeInTheDocument();
+  });
+
+  it('should display VM count when VMs are loaded', () => {
+    useIsKubevirtPluginActiveMock.mockReturnValue(true);
+    useWatchVirtualMachineInstancesMock.mockReturnValue([mockVirtualMachines, true, undefined]);
+
+    renderWithContext();
+
+    expect(screen.getByText('Virtual machine: 2')).toBeInTheDocument();
+  });
+
+  it('should render link to VM search page filtered by node', () => {
+    useIsKubevirtPluginActiveMock.mockReturnValue(true);
+    useWatchVirtualMachineInstancesMock.mockReturnValue([mockVirtualMachines, true, undefined]);
+
+    renderWithContext();
+
+    const link = screen.getByRole('link');
+    expect(link).toHaveAttribute(
+      'href',
+      '/k8s/all-namespaces/virtualmachines/search?rowFilter-node=test-node',
+    );
+  });
+
+  it('should call useWatchVirtualMachineInstances with node name', () => {
+    useIsKubevirtPluginActiveMock.mockReturnValue(true);
+    useWatchVirtualMachineInstancesMock.mockReturnValue([[], false, undefined]);
+
+    renderWithContext(mockNode);
+
+    expect(useWatchVirtualMachineInstancesMock).toHaveBeenCalledWith('test-node');
+  });
+
+  it('should display Virtual machines label with help text', () => {
+    useIsKubevirtPluginActiveMock.mockReturnValue(true);
+    useWatchVirtualMachineInstancesMock.mockReturnValue([mockVirtualMachines, true, undefined]);
+
+    renderWithContext();
+
+    expect(screen.getByText('Virtual machines')).toBeInTheDocument();
+  });
+
+  it('should display zero count when no VMs are found', () => {
+    useIsKubevirtPluginActiveMock.mockReturnValue(true);
+    useWatchVirtualMachineInstancesMock.mockReturnValue([[], true, undefined]);
+
+    renderWithContext();
+
+    expect(screen.getByText('Virtual machine: 0')).toBeInTheDocument();
+  });
+});