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Should You Buy NetApp Stock as AI Growth Meets a Premium Valuation?

Zacks Investment Research·
Should You Buy NetApp Stock as AI Growth Meets a Premium Valuation?

NetApp raised its fiscal 2027 revenue guidance to $7.975-$8.225 billion (17% growth midpoint) driven by accelerating AI, flash storage, and cloud demand. All-flash revenues surged 46.6% to $1.31B in Q1 FY2027 with approximately 350 AI deals added. However, the stock trades at a premium valuation of 19.5X forward earnings versus its sub-industry average of 10.7X, with gross margin pressure from higher component costs and product mix shifts limiting upside.

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