A 30-year storage incumbent re-rates on all-flash AI demand — at half the multiple of the AI complex — Quick Take
NetApp was the #5 name by turnover in Saturday's US VolumeSurge screen (+8.5% to $199.28 on $520M turnover), in a tape where Technology was the dominant sector (19 of 44 names passing all three filters) — and the one large-cap AI-infrastructure mover in that list that had not already been covered here. The move was the delayed repricing of a genuine blowout: in the delayed 2026-09-11 daily summary the AI-infra equity complex was still described as "the reliably supported equity complex" (Dell +350% YTD on an RBC initiation), and NetApp's September 2 Q1 FY2027 print ($2.03B revenue, +30% YoY; all-flash arrays +47%; billings +36%) was fully digested only this week, with Argus taking its price target to $225 from $200 and Barclays, Northland, Susquehanna and Morgan Stanley lifting targets.
| Period | Revenue | Rev Growth | Op Margin | Net Income |
|---|---|---|---|---|
| FY2022 (Apr '22) | $6,318M | +10.0% | 19.0% | $937M |
| FY2023 (Apr '23) | $6,362M | +0.7% | 18.2% | $1,274M |
| FY2024 (Apr '24) | $6,268M | -1.5% | 20.2% | $986M |
| FY2025 (Apr '25) | $6,572M | +4.9% | 21.7% | $1,186M |
| FY2026 (Apr '26) | $6,925M | +5.4% | 24.5% | $1,276M |
| TTM (to Jul '26) | $7,391M | +12.2% | 26.0% | $1,418M |
| Q1 FY2027 (Jul '26) | $2,025M | +30.0% | — | $375M GAAP |
FY2026 GAAP gross margin 70.7%, FCF $1,869M (27% of revenue), $1.36B returned to shareholders; net cash $1.04B. Q1 FY2027 non-GAAP EPS $2.58 (+66% YoY) vs $2.12 consensus on revenue of $2.03B vs $1.84B. FY2027 guidance was raised to $7.975–8.225B revenue and $9.73–10.03 non-GAAP EPS (from $7.325–7.575B), with Q2 guided to $2.025–2.175B revenue and $2.54–2.64 EPS. Dividend $0.52/quarter (~1.0% yield); Argus target $225.
This is the rare AI-infrastructure turn that shows up in the accounts rather than the narrative: +47% all-flash and +36% billings is a demand signature, and at ~20x forward with a 27% FCF margin NetApp is the cheapest way to own the AI build-out outside the crowded GPU and server trades. The real risk is that Q1 borrowed demand from later quarters and NAND-cost inflation eats the gross-margin gain — so the +8.5% day is the wrong entry point into a hawkish Fed print. Interesting as a value-flavoured AI storage holding; not a momentum chase here.
Disclaimer: AI-generated quick take for informational purposes only. Not investment advice. Data from public filings and financial data providers.