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Valued at $24.5 billion by market cap, California-based NetApp, Inc. (NTAP) operates in the technology sector, offering data management software, enterprise storage, and cloud services. The company provides hybrid and public cloud solutions to industries such as finance, healthcare, and telecommunications globally.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and NetApp fits this criterion perfectly. NetApp is renowned for its ONTAP data management software, which uniquely integrates cloud, hybrid, and on-premises environments with advanced data protection, storage efficiency, and seamless Kubernetes and multi-cloud support.
However, NetApp has dropped 11.8% from its 52-week high of $135.01, achieved in July. Shares of NTAP are down 5.6% over the past three months, underperforming the broader S&P 500 Index's ($SPX) nearly 3% gains over the same time frame.
Nevertheless, over a longer term, NTAP has risen 35% on a YTD basis, outperforming SPX's 18.1% gains. Shares of NetApp have soared 53.2% over the past 52 weeks, compared to SPX's 26.6% returns over the same time frame.
EL has been trading above its 200-day moving average since last year. But, it has remained below its 50-day moving average since late August.
NetApp has outperformed due to rising demand for its flash-based products and AI-driven hardware, which are better suited for high-performance computing environments. Additionally, the company has benefited from growth in its hybrid cloud business and improved profitability through cost-cutting measures.
However, the stock tumbled 9.6% following its Q1 earnings release on Aug. 28 due to concerns about slowing growth in its cloud segment despite better-than-expected revenue of $1.5 billion and adjusted EPS of $1.56 per share. Investors were also cautious about the company's lowered revenue guidance for Q2, which raised concerns about a potential growth slowdown.
To highlight NetApp's outperformance, its rival Western Digital Corporation (WDC) has gained 49.8% over the past 52 weeks and is up 24.8% on a YTD basis, both showing smaller gains compared to NTAP in the same periods.
Despite the stock’s strong price action over the past year, analysts are cautiously optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 18 analysts in coverage, and the mean price target of $132.33 is a premium of 11.2% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
