What Happened?
Shares of data storage company NetApp (NASDAQ: NTAP) fell 2.7% in the afternoon session after investors rotated out of AI-linked high-flyers following underwhelming earnings updates from Oracle and Broadcom as the core thesis shifted from "growth at any cost" to "prove the returns."
Oracle triggered the alarm by missing revenue estimates while simultaneously hiking capital expenditures by $15 billion. This reignited fears that AI infrastructure spending is outpacing actual monetization. Broadcom compounded the anxiety; despite beating earnings, its stock fell as CFO Kirsten Spears cautioned that gross margins may come under pressure as product mix shifts further toward system-level AI sales. This sparked a macro rotation away from AI infrastructure and power plays.
The shares closed the day at $115.66, down 2.9% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy NetApp? Access our full analysis report here.
What Is The Market Telling Us
NetApp’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 16 days ago when the stock dropped 1.3% on the news that its weak revenue forecast for the upcoming quarter overshadowed an otherwise solid earnings report. For its third quarter, NetApp posted revenue of $1.71 billion and adjusted earnings per share of $2.05, surpassing Wall Street's expectations. However, investors focused on the company's guidance for the next quarter, which at $1.69 billion, came in 1.1% below consensus estimates. This weaker-than-expected outlook suggested a more challenging environment ahead and appeared to be the primary driver for the stock's decline, outweighing an increase in the company's full-year profit forecast.
NetApp is flat since the beginning of the year, and at $115.66 per share, it is trading close to its 52-week high of $126.36 from September 2025. Investors who bought $1,000 worth of NetApp’s shares 5 years ago would now be looking at an investment worth $1,875.
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