NetApp Gains 2.01% as $270M Volume Ranks 486th in Daily Trading Activity

Market Snapshot

NetApp (NTAP) shares rose 2.01% on February 25, 2026, as the stock traded with a volume of $270 million, ranking 486th in terms of trading activity for the day. The price increase, though modest, reflects investor optimism ahead of the company’s fiscal Q3 earnings release scheduled for Thursday. Despite the upward movement, the stock’s 52-week range of $71.84 to $127.78 indicates a broader bearish trend, with shares currently trading near the lower end of that range.

Key Drivers

Wedbush analysts highlighted that investor concerns over NetApp’s margins, driven by rising memory costs, are “somewhat overdone.” The firm noted that the company’s pricing adjustments at the end of fiscal Q3 are expected to offset a significant portion of the margin pressure from higher component costs. This strategic move, coupled with the company’s early procurement of NAND flash memory, positions NetApp to navigate near-term supply chain challenges more effectively than peers. The analysts also emphasized that customers are proceeding with deals despite price hikes, suggesting demand remains resilient due to critical storage requirements and expectations of further cost increases.

The firm further identified a near-term sales tailwind from NetApp’s pricing strategy. By securing favorable NAND sourcing and adjusting pricing structures, the company is likely to see improved revenue visibility in the short term. Wedbush’s $115 price target, implying a 15.15% potential upside from the previous close, underscores confidence in this offset. However, the analysts cautioned that while the pricing strategy addresses immediate margin pressures, it does not fully resolve long-term structural challenges, particularly in the context of broader market dynamics affecting enterprise storage spending.

A key headwind for NetApp remains its lack of traction in artificial intelligence (AI) deals. Wedbush noted that the company has yet to secure significant contracts with neoclouds or sovereign data center builders, which are critical for demonstrating scalable, long-term growth. While enterprise storage spending is growing at a modest pace, the absence of AI-driven revenue streams limits NetApp’s ability to capitalize on the current AI boom. This gap contrasts with competitors leveraging cloud and AI infrastructure to drive top-line growth, potentially pressuring NetApp’s market position in the coming quarters.

Institutional investor activity and management’s conservative guidance also played a role in shaping market sentiment. Recent filings show that institutional investors slightly increased their stakes in NetApp, with entities like Rossby Financial LCC and Park Square Financial Group adding to their holdings. However, the firm’s management has historically set low earnings expectations, which may temper investor enthusiasm ahead of the fiscal Q3 report. Wedbush acknowledged that this conservative approach could lead to positive surprises if the company exceeds its guidance, but it also highlights the need for NetApp to demonstrate stronger growth in high-potential areas like AI and hybrid cloud solutions to justify a higher valuation.

The broader market context, including macroeconomic uncertainties and sector-specific challenges, adds complexity to NetApp’s outlook. Analysts at Zacks Investment Research noted that while NetApp’s hybrid-cloud strategy and recurring software revenue provide earnings visibility, its growth trajectory lags behind more aggressive peers. The company’s focus on enterprise storage, rather than emerging technologies like AI, may limit its ability to attract capital in a market increasingly prioritizing innovation. As NetApp prepares to report earnings, investors will closely watch for signs of progress in addressing these structural challenges and capitalizing on evolving industry trends.