NetApp (NTAP) experienced a significant surge in its stock price on Friday, climbing more than 26% to $180.12 by midday. The rally came after the data storage company reported better-than-expected fiscal fourth-quarter results and issued an optimistic forecast, fueled by robust demand for artificial intelligence (AI) infrastructure.
The company posted net revenue of $1.948 billion for the quarter, representing a 12% increase year-over-year. Non-GAAP earnings rose 26% to $2.43 per share, while GAAP earnings came in at $2.03 per share. NetApp's all-flash array revenue reached a record $1.2 billion, up 18% from the prior year. Public cloud revenue also grew 11% to $182 million, and free cash flow surged 41% to $900 million after capital expenditures.
CEO George Kurian described fiscal 2026 as a “landmark year” for the company, highlighting that AI projects are transitioning from experimental phases into real-world business applications. This shift has fundamentally changed how investors view storage—no longer just basic infrastructure but a critical component for moving data between data centers and public clouds. NetApp noted that demand for AI, cloud, and all-flash storage was a key driver in the quarter.
Kurian also revealed that NetApp closed approximately 500 AI and data-preparation deals in the fourth quarter, bringing the full-year total to over 1,100. CFO Wissam Jabre pointed to a “solid underlying enterprise IT demand environment,” with increasing AI activity expected to continue into fiscal 2026.
Looking ahead, NetApp guided for fiscal 2027 revenue in the range of $7.325 billion to $7.575 billion, with adjusted earnings per share between $8.70 and $9.00. For the current quarter, the company forecasts revenue of $1.75 billion to $1.90 billion and adjusted EPS of $2.05 to $2.15.
Analysts responded positively to the results. Barclays analyst Tim Long called the performance “solid growth across the board” and raised the price target to $199 from $120, maintaining an Overweight rating. Loop Capital also boosted its target to $200 from $130. Several other firms with neutral ratings raised their targets as well.
However, not all analysts were equally enthusiastic. Wedbush noted that while management’s goals appeared conservative, most of the upside seemed already priced into the stock. The firm kept its Neutral rating and raised its target to $150 from $115.
The broader tech sector also rallied, with AI infrastructure plays leading the charge. Dell Technologies (DELL) surged nearly 30% after raising its outlook, while Hewlett Packard Enterprise (HPE) and Super Micro Computer (SMCI) also moved higher. These gains helped push major U.S. indexes to fresh intraday highs.
Despite the positive momentum, NetApp acknowledged potential risks. The company warned that demand could be pulled forward from future quarters, and higher memory and component costs might force price adjustments, potentially squeezing margins if customers resist. If enterprise AI spending slows, maintaining the fiscal 2027 outlook could become more challenging.
NetApp’s stock surge has placed it back at the center of AI hardware discussions. The key question now is whether the company can convert this wave of AI and cloud orders into sustainable revenue growth, rather than a one-time boost.
