We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
NetApp's Enterprise AI Bet: Can DataPelago Buyout Accelerate Growth?
Read MoreHide Full Article
Key Takeaways
NetApp acquired DataPelago to add GPU-accelerated data processing directly to the storage layer.
NTAP says Nucleus enables zero-copy data activation by processing data where it already resides.
NetApp says the technology can deliver faster processing and lower infrastructure costs for AI workloads.
AI is transforming enterprise IT at an unprecedented pace. To capitalize on this booming trend, NetApp, Inc. (NTAP - Free Report) recently acquired DataPelago, a startup specializing in AI data infrastructure. The deal expands NetApp's intelligent data infrastructure portfolio by bringing GPU-accelerated data processing directly to the storage layer, allowing organizations to process data where it resides instead of copying it to separate AI infrastructure. The acquisition is likely to strengthen NetApp's competitive position in the rapidly growing AI infrastructure market. NetApp has already enhanced its ecosystem through partnerships with Cisco, Google Cloud, Red Hat and SK Telecom. Adding DataPelago extends that strategy.
At the core of the acquisition is Nucleus, DataPelago's universal data processing engine. Instead of transferring massive datasets into separate GPU clusters, Nucleus performs accelerated computing directly where enterprise data already resides. Its architecture uses heterogeneous computing by intelligently leveraging both CPUs and GPUs, enabling workloads to run within the storage environment itself. This approach creates what NetApp calls "zero-copy activation" of enterprise data. Rather than copying data multiple times across different AI systems, organizations can prepare datasets, govern sensitive information, execute transformations and feed AI models without creating additional copies.
According to NetApp, DataPelago's technology provides significant efficiency gains. Potential benefits include up to 10x faster processing compared to traditional architectures, infrastructure cost reductions of up to 80%, better GPU utilization, lower networking overhead and less storage duplication. For enterprises investing heavily in costly GPU infrastructure, these improvements could significantly boost return on investment.
However, competition remains intense. Major players such as Hewlett Packard Enterprise (HPE - Free Report) , Teradata Corporation (TDC - Free Report) and cloud providers are all investing heavily in AI infrastructure.
Competitive Pressure Clouding NTAP’s Growth Run
Acquisitions, such as Stemma, enhance Teradata's capabilities in data search and exploration, providing added value to its customers. Teradata is building on this foundation as it expands the Enterprise Vector Store to unify structured and unstructured data within a single governed platform, capable of supporting large vector volumes and high concurrent query demand from AI agents. Recent enhancements include multimodal support spanning text, images and audio, as well as additional agentic features through ecosystem integrations. The company is also developing an agentic framework, including an MCP Server, to enable querying, analysis and management of data with full context.
HPE has pursued buyouts to strengthen higher-margin hybrid IT models that blend on-premises infrastructure with cloud-like consumption. Hewlett Packard completed the acquisition of Juniper Networks in July 2025 to fortify its Networking business. In 2024, it acquired Morpheus Data, which has enhanced its GreenLake capabilities. In 2023, HPE acquired four businesses — OpsRamp, Axis Security, Athonet and Pachyderm. In 2021, it acquired Ampool, Zerto, Determined AI and CloudPhysics. The deal has expanded its capabilities and product portfolios in the fast-growing cloud space, including software-defined networks and converged and hyper-converged infrastructure. Its focus on a hybrid IT model will drive growth in the long run.
View the Zacks #1 Rank List
Image: Shutterstock
NetApp's Enterprise AI Bet: Can DataPelago Buyout Accelerate Growth?
Key Takeaways
AI is transforming enterprise IT at an unprecedented pace. To capitalize on this booming trend, NetApp, Inc. (NTAP - Free Report) recently acquired DataPelago, a startup specializing in AI data infrastructure. The deal expands NetApp's intelligent data infrastructure portfolio by bringing GPU-accelerated data processing directly to the storage layer, allowing organizations to process data where it resides instead of copying it to separate AI infrastructure. The acquisition is likely to strengthen NetApp's competitive position in the rapidly growing AI infrastructure market. NetApp has already enhanced its ecosystem through partnerships with Cisco, Google Cloud, Red Hat and SK Telecom. Adding DataPelago extends that strategy.
At the core of the acquisition is Nucleus, DataPelago's universal data processing engine. Instead of transferring massive datasets into separate GPU clusters, Nucleus performs accelerated computing directly where enterprise data already resides. Its architecture uses heterogeneous computing by intelligently leveraging both CPUs and GPUs, enabling workloads to run within the storage environment itself. This approach creates what NetApp calls "zero-copy activation" of enterprise data. Rather than copying data multiple times across different AI systems, organizations can prepare datasets, govern sensitive information, execute transformations and feed AI models without creating additional copies.
According to NetApp, DataPelago's technology provides significant efficiency gains. Potential benefits include up to 10x faster processing compared to traditional architectures, infrastructure cost reductions of up to 80%, better GPU utilization, lower networking overhead and less storage duplication. For enterprises investing heavily in costly GPU infrastructure, these improvements could significantly boost return on investment.
However, competition remains intense. Major players such as Hewlett Packard Enterprise (HPE - Free Report) , Teradata Corporation (TDC - Free Report) and cloud providers are all investing heavily in AI infrastructure.
Competitive Pressure Clouding NTAP’s Growth Run
Acquisitions, such as Stemma, enhance Teradata's capabilities in data search and exploration, providing added value to its customers. Teradata is building on this foundation as it expands the Enterprise Vector Store to unify structured and unstructured data within a single governed platform, capable of supporting large vector volumes and high concurrent query demand from AI agents. Recent enhancements include multimodal support spanning text, images and audio, as well as additional agentic features through ecosystem integrations. The company is also developing an agentic framework, including an MCP Server, to enable querying, analysis and management of data with full context.
HPE has pursued buyouts to strengthen higher-margin hybrid IT models that blend on-premises infrastructure with cloud-like consumption. Hewlett Packard completed the acquisition of Juniper Networks in July 2025 to fortify its Networking business. In 2024, it acquired Morpheus Data, which has enhanced its GreenLake capabilities. In 2023, HPE acquired four businesses — OpsRamp, Axis Security, Athonet and Pachyderm. In 2021, it acquired Ampool, Zerto, Determined AI and CloudPhysics. The deal has expanded its capabilities and product portfolios in the fast-growing cloud space, including software-defined networks and converged and hyper-converged infrastructure. Its focus on a hybrid IT model will drive growth in the long run.
NTAP Price Performance, Valuation & Estimates
Shares of NetApp have gained 5% in the past month against the Computer-Storage Devices industry’s decline of 19.1%.
Image Source: Zacks Investment Research
Regarding the price/book ratio, NTAP is trading at 24.04, higher than the industry’s multiple of 17.3.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NTAP’s earnings for fiscal 2027 has been revised upward over the past 60 days.
Image Source: Zacks Investment Research
NTAP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.