NetApp (NTAP) saw its shares jump approximately 13% in after-hours trading on Thursday, reaching near $161, after the company reported fiscal fourth-quarter results that surpassed Wall Street expectations. The data storage specialist posted revenue of $1.95 billion and non-GAAP earnings per share of $2.43, exceeding analyst projections of $2.27 per share on $1.87 billion in revenue, according to AlphaStreet.
The quarterly performance marks a 12% revenue increase year-over-year, driven by surging demand for AI and cloud storage solutions. NetApp's all-flash array net revenue hit a record $1.2 billion, up 18% from the prior year, as enterprises increasingly adopt solid-state storage systems to handle the massive datasets required for AI workloads. Public Cloud revenue, derived from storage services on cloud platforms, rose 11% to $182 million.
CEO George Kurian characterized fiscal 2026 as a "landmark year," noting that enterprise AI is shifting focus from raw compute power to managing unstructured data. "The bigger challenge now is working with files and information outside traditional databases," Kurian said, positioning NetApp to capitalize on this trend. The company's fiscal 2027 outlook calls for revenue between $7.325 billion and $7.575 billion, with adjusted earnings per share of $8.70 to $9.00. For the current July quarter, NetApp guided revenue of $1.75 billion to $1.90 billion and adjusted EPS of $2.05 to $2.15.
The broader market context was supportive, with the S&P 500 gaining 0.6% to a record close and the Nasdaq rising 0.9%. The AI trade is expanding beyond chips and servers into the data layer, where companies manage the large files behind AI models. Dell Technologies also lifted its annual outlook on Thursday, citing higher AI data-center demand, which underscored the sector's momentum. Melissa Otto, head of S&P Global Visible Alpha research, told Reuters that Dell is "better positioned than rivals" due to its scale and supplier relationships during the memory supply squeeze.
CFO Wissam Jabre highlighted a multi-year deal with Google Cloud as a key contributor to product revenue, emphasizing that cloud partnerships were a significant driver of the quarter's strength. However, Jabre also warned of margin risks from "rising memory and component costs." NetApp is addressing these pressures by negotiating with suppliers and adjusting pricing, but any customer pushback or pullback from big tech buyers could erode product margins and challenge the fiscal 2027 outlook.
The after-hours rally will face its first test on Friday when regular trading resumes. Analysts are expected to update their models focusing on AI storage demand, the impact of the Google Cloud deal, and margin dynamics. NetApp's performance signals that the AI infrastructure buildout is increasingly benefiting data management companies, as enterprises invest in storage solutions to support generative AI and other data-intensive applications.
