Why NetApp’s AI push with Google Cloud is back in focus

NetApp (NTAP) recently expanded its collaboration with Google Cloud, introducing Google Cloud NetApp Volumes features that aim to make it easier for enterprises to run data heavy AI workloads without rearchitecting existing environments.

The AI announcement arrives after a stretch of strong momentum, with a 30 day share price return of 10.44% and a 1 year total shareholder return of 26.11%, while the 3 year total shareholder return of 90.50% points to a long term build up in investor confidence.

If this AI partnership has you thinking more broadly about data and automation, it could be worth seeing which other companies are riding similar trends through 39 AI infrastructure stocks

With the stock up strongly over 1 and 3 years, trading near an average analyst price target yet screening with a solid value score and a flagged intrinsic discount, investors now face a key question: is there still a buying opportunity here, or has the market already priced in future growth?

Most Popular Narrative: 2.6% Undervalued

NetApp's most followed narrative points to a fair value of $117.13 per share versus the last close at $114.14, framing the stock as modestly undervalued and closely tied to its AI, flash storage, and cloud exposure.

Substantial growth in Keystone Storage-as-a-Service (up ~80% year-over-year) and increased deferred revenue (+9% year-over-year) indicate growing preference for subscription-based and as-a-service storage, supporting higher revenue visibility and margin expansion as mix continues to shift toward high-value services.
Expanding portfolio of AI-ready innovations, operating efficiencies, and consistent improvements in Public Cloud gross margins (now guided to a range of 80 to 85%, up from a range of 75 to 80%), are expected to further enhance profitability and drive long-term earnings growth.

Want to see what sits behind that profit story, and the AI and cloud assumptions that anchor it? The narrative leans heavily on steady revenue growth, firmer margins, and a future earnings multiple that still sits below many large tech peers.

Result: Fair Value of $117.13 (UNDERVALUED)

However, higher memory component costs and pressure on product gross margins could challenge the AI and cloud driven profit story that investors are currently focused on.

Next Steps

With so much optimism already reflected in the story, it makes sense to move quickly and test the narrative against your own expectations. To see what investors are excited about right now, take a closer look at the 5 key rewards

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.