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Key Takeaways NTAP's Public Cloud revenue grew 11% in Q4 fiscal 2026, led by first-party and marketplace services.NetApp expanded AI cloud use cases, helping customers scale secure hybrid and multi-cloud deployments.NTAP expects enterprise IT spending and AI adoption to sustain cloud storage demand in fiscal 2027. NetApp, Inc. (NTAP - Free Report) is benefiting from rising demand for public cloud services as enterprises continue expanding their cloud environments and increasing AI adoption. The company’s Public Cloud business maintained strong momentum in fiscal 2026, supported by growing demand for hyperscaler first-party and marketplace storage services. In the fourth quarter of fiscal 2026, Public Cloud revenue increased 11% year over year to $182 million, while excluding the prior-year contribution from the divested Spot business, revenue grew 18%. Management attributed this performance to strong demand for first-party and marketplace storage services, reflecting customers’ continued adoption of NetApp’s cloud offerings.

For fiscal 2026, Public Cloud revenue reached $688 million. Management stated that first-party and marketplace cloud services grew 30% during the year, driven by increasing demand from both new and existing customers that are extending NetApp’s capabilities deeper into their cloud environments. Customers are using NetApp to simplify and scale hybrid and multi-cloud deployments through unified data management capabilities that provide operational consistency and agility.

The company also noted that its expanding cloud portfolio is creating new opportunities across AI and additional industry verticals. Examples include an insurance company connecting Azure Databricks directly to data stored in Azure NetApp Files for secure financial risk modeling and data science, and an engineering company deploying a GenAI chatbot on AWS using FSx for NetApp ONTAP to enable secure, permission-aware access to data while reducing operational overhead.

Management also emphasized the profitability of the Public Cloud business, with fourth-quarter gross margin reaching 85.7%, driven by continued margin expansion. The company believes that continued growth in Public Cloud can provide additional earnings leverage as the business becomes a larger part of the overall revenue mix.

NetApp’s fiscal 2027 outlook assumes continued momentum in enterprise IT spending alongside increasing AI activity. Management expects these trends to support cloud use cases that connect governed enterprise data with AI and analytics services while sustaining strong demand for first-party and marketplace cloud storage services.

Taking a Look at NTAP’s CompetitorsSeagate Technology Holdings plc (STX - Free Report) is strengthening its position in cloud infrastructure as hyperscale customers continue expanding AI-driven data center capacity. In the March quarter, cloud demand helped data center revenue rise 55% year over year to $2.5 billion, accounting for 80% of total revenues. The company is accelerating the rollout of its Mozaic platform, with shipments reaching 75% of leading global cloud customers and full qualification expected soon. Its HAMR-based high-capacity drives provide a cost- and power-efficient solution for large-scale cloud storage, while long-term supply agreements, build-to-order contracts and sustained hyperscaler investments support strong demand and revenue visibility through 2028 and beyond.

Western Digital Corporation (WDC - Free Report) is strengthening its cloud storage business by delivering high-capacity HDD technologies that support the rapid expansion of AI and hyperscale data centers. The company is working closely with leading cloud providers, shipping 222 exabytes in the quarter, up 34% year over year, while accelerating adoption of its ePMR, UltraSMR and upcoming HAMR technologies. It has secured firm purchase orders with its top seven customers through 2026 and multi-year agreements extending into 2028. Western Digital also continues qualifying next-generation HDDs and PCIe Gen5 data center SSDs with major cloud companies, positioning it to benefit from sustained cloud infrastructure investments.

NTAP Price Performance, Valuation & EstimatesShares of NetApp have gained 3.8% in the past month against the Computer-Storage Devices industry’s decline of 36.9%.

Image Source: Zacks Investment Research

Regarding the price/book ratio, NTAP is trading at 23.77, higher than the sector’s multiple of 15.11.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for NTAP’s earnings for fiscal 2027 has been revised upward over the past 60 days.

Image Source: Zacks Investment Research

NTAP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Embedding GPU-accelerated intelligence enables enterprises to easily discover, govern, and activate data for AI and analytics at the source

SAN JOSE, Calif.--(BUSINESS WIRE)--NetApp® (NASDAQ: NTAP), the Intelligent Data Infrastructure company, today announced it has acquired DataPelago, a California-based AI data infrastructure company recognized for its innovative approach to eliminating data processing bottlenecks for AI and analytics workloads. The acquisition marks a foundational expansion of NetApp's portfolio, enabling GPU-accelerated data processing aligned directly with the storage layer. With this acquisition, NetApp establishes itself as the company that makes zero-copy activation of enterprise data for AI real.

AI is the defining platform shift of our era, but enterprises are discovering that their greatest bottleneck is preparing, governing, and activating their data fast enough to put AI into production. The key to accomplishing this objective is to enable accelerated computing where the data is created and stored. DataPelago solves this challenge by fundamentally reimagining where accelerated compute happens: at the data layer, not above it.

"As AI models and the chips that power them get ever more effective, enterprises need data infrastructure that is just as intelligent and powerful to harness the potential of their data," said George Kurian, Chief Executive Officer at NetApp. "NetApp is leading the industry in helping customers drive innovation and generate business value by giving them full command of their most important asset: their data. With DataPelago, we are extending our ability to help customers understand and process their data with the agility required to unleash competitive advantage.”

DataPelago's core technology, Nucleus, is a universal data processing engine that uses heterogeneous accelerated computing across CPUs and GPUs to process data where it lives. By processing data at the storage layer rather than moving it to external compute clusters, Nucleus reduces infrastructure costs by up to 80 percent and delivers performance up to 10 times faster than conventional approaches. In addition, by not requiring customers to copy their data from their operational systems to AI-systems, DataPelago eliminates the single biggest bottleneck in enterprise AI deployment. DataPelago’s technology is delivering value at large enterprises across multiple industries, accelerating demanding workloads while improving infrastructure efficiency at scale.

"DataPelago is on a mission to eliminate the data processing bottlenecks that prevent AI innovation from reaching its full potential," said Rajan Goyal, Founder and Chief Executive Officer of DataPelago. "Joining NetApp gives us the opportunity to combine our breakthrough processing technology with the industry's best data infrastructure portfolio. Enterprises have invested billions in GPUs and AI models, but their data remains fragmented, leaving valuable computing resources to sit idle rather than putting these investments to work. Together, we’re positioned to help customers simplify and accelerate AI deployment at scale."

"DataPelago's Nucleus engine brings software-defined acceleration directly to the storage layer, processing data across CPUs and GPUs so enterprises can prepare, govern, and activate their data for AI without moving it. This is true zero-copy activation," said Syam Nair, Chief Product Officer at NetApp. "NetApp manages more enterprise data across more environments than anyone in the industry. The next phase of AI will be won by those who make that data work at the source, and the DataPelago team brings the technical depth and velocity to get us there faster."

Following the acquisition, DataPelago will operate as a wholly owned subsidiary of NetApp. This news signals a continued growth trajectory for NetApp, following recent industry-leading partnerships with Cisco, Google Cloud, Red Hat, and SK Telecom, among others.

"Safe Harbor" Statement Under U.S. Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements about the anticipated benefits of the acquisition of DataPelago, including the ability to align GPU-accelerated data processing with the storage layer and enable zero-copy activation of enterprise data for AI; the ability of the technologies to reduce infrastructure costs, accelerate performance, and eliminate data processing bottlenecks for enterprise AI deployment; our business, economic and market outlook; our overall future prospects; demand for our AI solutions and other offerings; and our ability to deliver increasing results and value for our stakeholders. These and other important factors are described in reports and documents we file from time to time with the Securities and Exchange Commission, including the factors described under the sections titled "Risk Factors" in our most recently filed annual report on Form 10-K and quarterly report on Form 10-Q. All statements made in this release are made only as of the date set forth at the beginning of this release. We disclaim any obligation to update information contained in this press release whether as a result of new information, future events, or otherwise.

Statement of Product Direction

This press release discusses NetApp's vision for future innovation, including the anticipated alignment of DataPelago's technology with NetApp’s portfolio. This information is shared solely for informational purposes and should not be relied upon in making purchasing decisions. NetApp makes no commitment and has no obligation to develop or deliver any products, services, integrations, or any related features, material, code or functionality described herein, including any capabilities resulting from the acquisition of DataPelago. The development, release and timing of any features or functionality for NetApp products and services, including those offering DataPelago's technology, remains at the sole discretion of NetApp. NetApp's strategy and possible future developments, product and platform directions, and functionality, including plans related to DataPelago's technology, are all subject to change without notice. We disclaim any obligation to update information contained in this press release whether as a result of new information, future events, or otherwise.

About NetApp

For more than three decades, NetApp has helped the world’s leading organizations navigate change – from the rise of enterprise storage to the intelligent era defined by data and AI. Today, NetApp is the Intelligent Data Infrastructure company, helping customers turn data into a catalyst for innovation, resilience, and growth.

At the heart of that infrastructure is the NetApp data platform – the unified, enterprise-grade, intelligent foundation that connects, protects, and activates data across every cloud, workload, and environment. Built on the proven power of NetApp ONTAP, our leading data management software and OS, and enhanced by automation through the AI Data Engine and AFX, it delivers observability, resilience, and intelligence at scale.

Disaggregated by design, the NetApp data platform separates storage, services, and control so enterprises can modernize faster, scale efficiently, and innovate without lock-in. As the only enterprise storage platform natively embedded in the world’s largest clouds, it gives organizations the freedom to run any workload anywhere with consistent performance, governance, and protection.

With NetApp, data is always ready – ready to defend against threats, ready to power AI, and ready to drive the next breakthrough. That’s why the world’s most forward-thinking enterprises trust NetApp to turn intelligence into advantage.

Learn more at www.netapp.com or follow us on X, LinkedIn, Facebook, and Instagram.

NETAPP, the NETAPP logo, and the marks listed at www.netapp.com/TM are trademarks of NetApp, Inc. Other company and product names may be trademarks of their respective owners.

About DataPelago

DataPelago is driving the data acceleration revolution that AI demands. Today, AI's relentless hunger for data acceleration at massive scale has created the ultimate chokepoint — without economically scaled data processing, AI innovation itself will be throttled. At DataPelago, we’re unleashing breakthrough thinking to transform data processing economics and ignite the next wave of AI-powered revolution.

DataPelago Nucleus is the world's first universal data processing engine built for accelerated computing, purpose-built to process any type of data, operate across any hardware, and support any query engine, delivering new price/performance benefits that make it viable to extract value from all the data in the world, igniting an AI-powered revolution.

Key Takeaways NetApp delivered record fiscal 2026 all-flash revenues of $4.2B, up 11% year over year.NTAP recorded about 500 AI and data prep wins in Q4, exceeding 1,100 for fiscal 2026.NetApp expects higher enterprise AI activity in fiscal 2027 and guided revenues of $7.325B-$7.575B. NetApp, Inc. (NTAP - Free Report) is benefiting from the growing adoption of all-flash storage as enterprises modernize their infrastructure and expand AI deployments. The company delivered record all-flash performance for fiscal 2026, with all-flash revenue reaching $4.2 billion, an increase of 11% year over year. Fourth-quarter all-flash revenue was $1.2 billion, up 18% from the prior-year quarter, reflecting strong customer demand for high-performance storage solutions.

Management attributed this momentum to broad adoption across public cloud, all-flash and Keystone offerings as customers continue to modernize infrastructure and scale AI workloads.

AI adoption has emerged as a major driver of all-flash demand. NetApp stated that enterprises are investing in high-performance flash, capacity flash and block storage environments to ensure GPUs remain fully utilized by providing continuous access to large volumes of data. The company noted that approximately 500 AI and data preparation wins were recorded in the fourth quarter alone, bringing the fiscal 2026 total to more than 1,100. Management added that all elements of its flash portfolio performed strongly in enterprise AI deployments, while hybrid flash also gained traction in less demanding AI environments.

NetApp is strengthening its all-flash portfolio through new AI-focused innovations. In fiscal 2026, it introduced AFX and the AI Data Engine, both of which management said are seeing encouraging early customer and partner momentum. The company also enhanced the performance and capabilities of its all-flash arrays and expanded its converged AI solutions to simplify AI infrastructure, eliminate data silos and accelerate data pipelines. Early AFX deployments have secured wins in Neo cloud, financial services, hedge funds and life sciences, while AI Data Engine is helping customers organize large volumes of unstructured data for AI projects.

The company believes cyber resilience is another differentiator for its all-flash offerings. A European aerospace customer selected NetApp’s all-flash arrays in a competitive greenfield deployment, citing their high performance, ransomware protection, cyber resilience capabilities and seamless partner ecosystem integration. NetApp expects enterprise AI activity in fiscal 2027 to be higher compared with fiscal 2026 and has guided revenue in the range of $7.325 billion to $7.575 billion.

Taking a Look at NTAP’s CompetitorsSeagate Technology Holdings plc (STX - Free Report) is well poised to gain from AI-led storage demand, a robust technology roadmap anchored in Mozaic and HAMR and disciplined execution focused on converting demand into profitable growth and long-term value creation. Cloud drives most data center revenue, with Mozaic shipments reaching 75% of top cloud customers, and full qualification expected in the ongoing quarter. It expects stronger FCF throughout 2026, driven by steady demand, efficiency gains and disciplined spending. Management raised its long-term outlook, now expecting at least 20% annual revenue growth over the next few years, driven by strong cloud demand and continued hyperscaler investments in AI infrastructure, with the March quarter marking the 10th straight quarter of cloud-led revenue growth. Fiscal 2026 capex is expected to stay within 4-6% of sales.

Western Digital Corporation (WDC - Free Report) is gaining from strength across end markets, riding on AI-led storage needs and multi-year agreements extending through 2028-29. Cloud end market derives a lion’s share of its sales, fueled by strong demand for high-capacity nearline drives and favorable pricing. Higher-capacity drives and solid UltraSMR uptake that improved customer TCO are aiding margins, while strong operating leverage, lower interest costs and tax efficiency are fueling EPS growth. The company is advancing areal density and boosting performance with high-bandwidth drives. It strengthened the balance sheet by selling 5.8 million SanDisk shares, cutting debt by $3.1 billion, leaving $1.6 billion in convertible debt and ending with a $450 million net cash position. Western Digital expects fiscal fourth-quarter revenue of $3.65B, up 40% year over year at the midpoint.

NTAP Price Performance, Valuation & EstimatesShares of NetApp have gained 34.2% in the past month against the Computer- Storage Devices industry’s growth of 54%.

Image Source: Zacks Investment Research

Regarding the price/book ratio, NTAP is trading at 23.16, lower than the sector’s multiple of 23.56.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for NTAP’s earnings for fiscal 2027 has been revised upwards over the past 60 days.

Image Source: Zacks Investment Research

NTAP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.