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NetApp, a Zacks Rank #1 (Strong Buy), has quietly become one of the cleanest ways to own the data layer of the artificial intelligence buildout. What was long dismissed as a legacy enterprise hardware vendor has reinvented itself as a hybrid-cloud data infrastructure provider, and the market is finally paying up for the transformation.
Shares have more than doubled over the past year and are trading within striking distance of all-time highs. That kind of persistent relative strength, paired with a sharp acceleration in earnings estimate revisions, is precisely the combination we look for in a market leader.
NetApp is part of the Zacks Computer – Storage Devices industry group, which currently ranks in the top 2% out of approximately 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform over the next 3 to 6 months, just as it has over the past year:
Image Source: Zacks Investment Research
Take note of the favorable characteristics for this group below. Stocks in this industry are relatively undervalued and are projected to experience above-average earnings growth, signaling a powerful combination that typically leads to higher stock prices over time.
Image Source: Zacks Investment Research
Historical research studies suggest that approximately half of a stock's price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
It's no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our odds of success.
Company Description
NetApp provides enterprise data storage systems and cloud data services worldwide. The company operates through two segments, Hybrid Cloud and Public Cloud. Its ONTAP operating system underpins a family of all-flash arrays, while its first-party storage services are embedded directly inside Amazon Web Services, Microsoft Azure, and Google Cloud — a distribution advantage that no pure hardware competitor can replicate.
What separates NetApp from the rest of the storage field right now is placement rather than product. Artificial intelligence training and inference workloads are extraordinarily data-hungry, and the unstructured data that feeds them has to live somewhere fast, governed, and accessible from both on-premise and cloud environments. That is precisely the problem NetApp has spent three decades solving. Management has now signed roughly 350 AI and data-lake deals, a pipeline that barely existed two years ago.
A Blowout Quarter and Rising Estimates
NetApp reported fiscal first-quarter 2027 results in early September that were strong on every line that matters. Adjusted earnings came in at $2.58 per share against the $2.13 Zacks Consensus Estimate, a 21.1% beat and a 66.5% increase from the year-ago quarter. Revenue of $2.03 billion grew 29.9% year over year and topped the roughly $1.84 billion consensus by about 10%.
The mix underneath those numbers is what makes the quarter credible. All-flash array revenue jumped 46.6% to $1.309 billion, and public cloud revenue rose 28% to $206 million. Together, those two businesses now account for roughly 75% of total revenue, meaning the fastest-growing and highest-margin parts of the portfolio are also the largest.
Management responded by raising full-year fiscal 2027 revenue guidance by $650 million to a range of $7.975–$8.225 billion, which implies roughly 17% growth. The earnings outlook moved up to $9.73–$10.03 per share, a midpoint of $9.88 and growth of approximately 22%.
Analysts have followed management higher. Looking into the current quarter, the Zacks Consensus Estimate now stands at $2.60 per share on $2.11 billion in revenue, reflecting 26.8% earnings growth and 23.8% revenue growth versus the year-ago period. Rising estimates of that magnitude at a company of this size are uncommon, and they are the engine behind the Zacks Rank.
Image Source: Zacks Investment Research
Let's Get Technical
NetApp (NTAP - Free Report) shares remain above upward-sloping 50-day (blue line) and 200-day (red line) moving averages, and the stock has carved out a clean series of higher highs and higher lows throughout 2026. The September earnings gap came on a surge of volume, which tells us institutions were adding to positions rather than taking profits into strength.
Image Source: StockCharts
Only stocks in genuinely powerful uptrends make this type of move and sustain it. This is the kind of name we want in our portfolio — one that is trending well and receiving positive earnings estimate revisions at the same time.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As long as that trend remains intact and NetApp continues to deliver earnings beats, the stock should continue its bullish run.
Bottom Line
Backed by a leading industry group, a stellar earnings history, and a meaningful guidance raise, it isn't difficult to see why this company is a compelling investment right now. NetApp carries the highly coveted Zacks Rank #1 (Strong Buy) driven by favorable estimate momentum.
Robust fundamentals combined with a strong technical trend certainly justify adding shares to the mix. If you haven't already done so, be sure to put NTAP on your watchlist.
View the Zacks #1 Rank List
Bull of the Day: NetApp (NTAP)
NetApp, a Zacks Rank #1 (Strong Buy), has quietly become one of the cleanest ways to own the data layer of the artificial intelligence buildout. What was long dismissed as a legacy enterprise hardware vendor has reinvented itself as a hybrid-cloud data infrastructure provider, and the market is finally paying up for the transformation.
Shares have more than doubled over the past year and are trading within striking distance of all-time highs. That kind of persistent relative strength, paired with a sharp acceleration in earnings estimate revisions, is precisely the combination we look for in a market leader.
NetApp is part of the Zacks Computer – Storage Devices industry group, which currently ranks in the top 2% out of approximately 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform over the next 3 to 6 months, just as it has over the past year:
Image Source: Zacks Investment Research
Take note of the favorable characteristics for this group below. Stocks in this industry are relatively undervalued and are projected to experience above-average earnings growth, signaling a powerful combination that typically leads to higher stock prices over time.
Image Source: Zacks Investment Research
Historical research studies suggest that approximately half of a stock's price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
It's no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our odds of success.
Company Description
NetApp provides enterprise data storage systems and cloud data services worldwide. The company operates through two segments, Hybrid Cloud and Public Cloud. Its ONTAP operating system underpins a family of all-flash arrays, while its first-party storage services are embedded directly inside Amazon Web Services, Microsoft Azure, and Google Cloud — a distribution advantage that no pure hardware competitor can replicate.
What separates NetApp from the rest of the storage field right now is placement rather than product. Artificial intelligence training and inference workloads are extraordinarily data-hungry, and the unstructured data that feeds them has to live somewhere fast, governed, and accessible from both on-premise and cloud environments. That is precisely the problem NetApp has spent three decades solving. Management has now signed roughly 350 AI and data-lake deals, a pipeline that barely existed two years ago.
A Blowout Quarter and Rising Estimates
NetApp reported fiscal first-quarter 2027 results in early September that were strong on every line that matters. Adjusted earnings came in at $2.58 per share against the $2.13 Zacks Consensus Estimate, a 21.1% beat and a 66.5% increase from the year-ago quarter. Revenue of $2.03 billion grew 29.9% year over year and topped the roughly $1.84 billion consensus by about 10%.
The mix underneath those numbers is what makes the quarter credible. All-flash array revenue jumped 46.6% to $1.309 billion, and public cloud revenue rose 28% to $206 million. Together, those two businesses now account for roughly 75% of total revenue, meaning the fastest-growing and highest-margin parts of the portfolio are also the largest.
Management responded by raising full-year fiscal 2027 revenue guidance by $650 million to a range of $7.975–$8.225 billion, which implies roughly 17% growth. The earnings outlook moved up to $9.73–$10.03 per share, a midpoint of $9.88 and growth of approximately 22%.
Analysts have followed management higher. Looking into the current quarter, the Zacks Consensus Estimate now stands at $2.60 per share on $2.11 billion in revenue, reflecting 26.8% earnings growth and 23.8% revenue growth versus the year-ago period. Rising estimates of that magnitude at a company of this size are uncommon, and they are the engine behind the Zacks Rank.
Image Source: Zacks Investment Research
Let's Get Technical
NetApp (NTAP - Free Report) shares remain above upward-sloping 50-day (blue line) and 200-day (red line) moving averages, and the stock has carved out a clean series of higher highs and higher lows throughout 2026. The September earnings gap came on a surge of volume, which tells us institutions were adding to positions rather than taking profits into strength.
Image Source: StockCharts
Only stocks in genuinely powerful uptrends make this type of move and sustain it. This is the kind of name we want in our portfolio — one that is trending well and receiving positive earnings estimate revisions at the same time.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As long as that trend remains intact and NetApp continues to deliver earnings beats, the stock should continue its bullish run.
Bottom Line
Backed by a leading industry group, a stellar earnings history, and a meaningful guidance raise, it isn't difficult to see why this company is a compelling investment right now. NetApp carries the highly coveted Zacks Rank #1 (Strong Buy) driven by favorable estimate momentum.
Robust fundamentals combined with a strong technical trend certainly justify adding shares to the mix. If you haven't already done so, be sure to put NTAP on your watchlist.