NetApp (NASDAQ:NTAP) was upgraded by JP Morgan following the company's fiscal 2024 fourth quarter financial report and outlook.
The provider of unified data storage, integrated data services and cloud operations solutions marked up to about 1% late Friday morning.
“Are upgraded NetApp stock to Neutral from Underweight earlier, as our concerns about headwinds to gross margin amid rising memory prices have not materialized, and the company is executing aggressively to manage headwinds through pre-purchasing memory, while driving a richer portfolio mix relative to higher-margin flash drives,” JP Morgan analysts Samik Chatterjee, Joseph Cardoso and Priyanka Thapa said in a note to investors.
The investment firm also increased its price target from $95 to $125.
“After the initial phase of the ai investment cycle focused on cloud and compute, storage is expected to benefit more in the enterprise investment cycle towards workload inference,” Chatterjee said. “If the ai investment cycle accelerates and storage becomes a beneficiary of ai at a later stage, that would lead to increased customer spending and a rebound in storage sooner than we expect.”
NetApp CEO George Kurian expressed mild optimism that the macroeconomic environment is improving.
“Looking ahead to FY25, we are cautiously optimistic about the macroeconomic environment,” Kurian said during Wednesday's earnings call. “The backdrop is better now than at the beginning of FY24. We will remain focused on our top priorities as we continue to raise the bar on execution and maintain our operational discipline.”
