As NetApp prepares to report its fiscal first-quarter results on Wednesday, analysts at BofA Securities are looking beyond the immediate numbers. In a note published Monday, the bank said the company is poised to benefit from a sustained wave of AI-driven storage demand, and that management could use the earnings call to raise its fiscal 2027 guidance.
NetApp, a data storage and cloud services company, has been working to position itself as a key player in the infrastructure that powers artificial intelligence. While much of the market's attention has focused on AI chips and servers, the data that feeds those systems has to live somewhere — and that's where storage companies like NetApp come in.
What BofA is watching
In its note, BofA highlighted several specific drivers behind its optimism. The first is AI "inference" — the process of running a trained AI model in real time to generate answers or make predictions. Unlike the initial training phase, which requires massive computing power, inference workloads tend to be more distributed and often require fast, reliable access to stored data. That, BofA argues, is creating steady demand for storage systems that can handle high-speed retrieval.
The bank also pointed to data-lake upgrades. A data lake is a centralized repository that allows companies to store vast amounts of structured and unstructured data. As businesses increasingly use AI to analyze that data, they're finding they need to modernize their storage infrastructure to keep up. That's a trend that could benefit NetApp over multiple quarters, not just one.
BofA also noted that recent price increases don't appear to be scaring off customers, even though sales may be skewing toward lower-priced systems. That suggests demand is holding up even as buyers become more cost-conscious — a sign that the AI storage boom may have legs.
The numbers on the table
For the fiscal first quarter, BofA expects NetApp to report revenue of $1.84 billion and earnings per share of $2.13. Those figures are broadly in line with what Wall Street has been modeling, so the bank's attention is on what management says about the future.
The potential for a raised fiscal 2027 outlook is a key point. Companies often use earnings calls to update their forward guidance, and if NetApp's management signals stronger-than-expected demand from AI-related storage, that could be a bigger catalyst for the stock than the quarter itself.
This isn't the first time BofA has flagged AI-related tailwinds in the tech infrastructure space. The bank has also noted that HPE's AI server demand is outpacing supply, a similar theme of AI driving hardware sales. And the broader trend of AI data center buildout has been a major theme across the market, with companies like SLB buying a cooling maker to tap into AI data center demand.
What it means for investors
For everyday investors, the key takeaway is that AI's impact on the stock market goes beyond the chipmakers and cloud giants that dominate headlines. Storage is a critical piece of the AI puzzle, and companies like NetApp are positioned to benefit as businesses upgrade their data infrastructure.
However, it's important to remember that analyst notes are just one opinion. BofA's view is optimistic, but there are risks. If AI spending slows, or if competition in the storage market intensifies, NetApp's growth could disappoint. The company's results on Wednesday will give investors a clearer picture of whether the AI storage boom is real and durable.
For those watching the broader market, the AI trade has been a major driver of stock gains this year. But as global stock funds saw their first outflows in 14 weeks ahead of key events like Nvidia's earnings and the Jackson Hole symposium, there are signs that investors are becoming more selective. That makes company-specific news like NetApp's earnings all the more important.
NetApp's report on Wednesday will be more than just a check on its quarterly performance. It will be a test of whether the AI storage narrative holds up under scrutiny. If management raises guidance, it could signal that the company's AI tailwinds are stronger than expected. If not, the stock could face pressure despite the optimistic analyst note.
Either way, the story is worth watching for anyone invested in the tech sector or the broader AI theme.
