NetApp (NTAP) has drawn fresh investor attention after signing a four year Enterprise Agreement with Google Cloud to deploy its storage platform in Google Distributed Cloud’s air gapped, sovereign environments for highly regulated workloads.

That news comes on top of a busy period for NetApp, including its recent collaboration with Nutanix and moves to strengthen cyber resilience. The stock’s short term share price momentum contrasts with a much stronger multi year total shareholder return profile.

If this Google Cloud deal has you thinking more broadly about data and AI infrastructure, it could be worth checking out our screener of 38 AI infrastructure stocks

With NetApp’s multi year total return, recent AI focused partnerships and an indicated 42% intrinsic discount, the question is simple: is the share price still underestimating the next phase of growth, or is the market already pricing it in?

Most Popular Narrative: 11.4% Undervalued

With NetApp’s fair value framework at about $117.93 against a last close of $104.53, the widely followed narrative sees room between price and fundamentals, anchored by specific growth and margin assumptions.

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 80–85%, up from 75–80%), are expected to further enhance profitability and drive long-term earnings growth.

Want to see what is behind that 11.4% gap? The narrative leans on measured revenue growth, firmer margins, and a richer earnings multiple. Curious which specific forecasts tie all three together.

Result: Fair Value of $117.93 (UNDERVALUED)

However, higher memory costs pressuring product margins, along with the ongoing shift toward hyperscalers and subscription models, could challenge the assumptions behind that 11.4% upside narrative.

Next Steps

With that mixed sentiment in mind, it makes sense to move quickly, review the underlying data for yourself and weigh the potential rewards. To see what the market is currently optimistic about, check out 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.