💼 With AI pushing markets up, many investors are left wondering if there’s still value left in the tech sector. Companies directly tied to AI have seen valuations soar, making it tough to find reasonably priced opportunities. But NetApp (NASDAQ: NTAP) could be a rare exception. Despite a recent rise, it still trades at a modest valuation, making it an attractive play for those seeking AI exposure without overpaying.
📊 NetApp, known for its data management solutions, is now meeting the rising demand for unstructured data storage—essential for training and deploying AI models. As AI applications consume massive datasets, companies like NetApp, capable of handling and storing unstructured data, become vital. It’s no surprise that NetApp has recently seen its sales reinvigorated by this trend.
🚀 Despite its rally, NetApp still trades at only 17x FY25 P/E, below the broader S&P 500’s 20x multiple. Moreover, its FY25 revenue is expected to reach $6.68 billion, with EPS projected to grow, making it a true value play. The company’s solid financial position—with $3.02 billion in cash and $2.39 billion in debt—provides an additional layer of safety for investors looking for stability.
💡 But NetApp’s appeal isn’t just about today’s numbers. Management believes the AI growth story is only beginning. With new AI-related deals, NetApp is laying the groundwork for even more growth. While many IT companies face uncertain demand, NetApp’s 11.5% y/y increase in billings signals strong momentum for future revenue.
💸 NetApp’s valuation and growth prospects make it a compelling investment case. It’s a rare opportunity to buy into an AI-related play without paying sky-high multiples. If you’re looking for a way to capitalize on AI’s impact without taking on the risk of overhyped tech stocks, NetApp might be the hidden gem you’ve been searching for.
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IMPORTANT: This article is of general nature only and readers should obtain advice specific to their circumstances from professional advisers.