NetApp (NTAP) Stock Forecast & Price Target

NetApp is increasingly compelling because AI-driven data retention is turning storage from an optional spend into a necessity, especially as enterprises keep more private data on-prem while building long-horizon agent workflows. The latest results showed broad-based demand with revenue of $2.025 billion, up 30% year over year, EPS of $2.58, up 66%, non-GAAP gross margin of 70.6%, and operating margin leverage near 31%, while deferred revenue of $4.846 billion and RPO of $5.65 billion support durability. With Hybrid Cloud still the core engine, record All Flash Array revenue of $1.309 billion, Public Cloud growth of 28% year over year, and FY2027 revenue guidance raised to $7.975 billion-$8.225 billion, the business looks well positioned for continued earnings power expansion.

NetApp is exposed to weakening demand dynamics as tariff and export-control uncertainty, especially around China, could delay customer spending and keep investors cautious, while domestic China WFE is expected to stay selective and down HSDs Y/Y in CY26 after a ~40% Y/Y 5Y CAGR. Its core Hybrid Cloud business still drives most revenue, but the shift to cloud-centric storage can cannibalize on-premise hardware demand just as competition and potential slower innovation pressure market share. Financially, guidance implied revenue of about $8.1B for FY27 (up 17% Y/Y), yet product gross margins fell 150 bps sequentially and are expected to ease from nearly 55% to the low-50s%, signaling limited pricing power.